Why pre-shipment inspection is essential
When you’re sourcing from China it is necessary to get your goods checked. After the shipment is done, the transfer is irreversible. Therefore it is wise to do a pre-shipment inspection (PSI). In this blog, the steps that are taken in the pre-shipment inspection will be reviewed.
Before companies decide to do business together, multiple inspections are already finished: Pre-Production Inspection (PPI), Initial-Production Inspection (IPI) and Mid-Production Inspection (MPI). When the contract is signed, the buying company asks its bank for a letter of credit to assure the payment to the seller of goods. Once the licenses are obtained, the down payment (based on a certain percentage of the total volume) is made and the inspection order is forwarded to the particular company.
An independent third party inspection agency will inform the exporter about the date, time and location to execute their expertise. They also provide the exporting company with documentation as a bill of lading, commercial invoice, transportation bill, country of origin invoice, packing list and certificates of quality and inspection. Regulations are strict to avoid delays and customs difficulties.
On the agreed date and time the pre-shipment inspection will be performed. The quality, quantity, marking, packing and loading of the shipments are checked carefully by the third party. The buying company assigns the impartial company the number of goods that need to be checked. Besides the pre-shipment inspection, a full shipment inspection and a container loading inspection are great tools to make sure that you will receive an appropriate batch of goods.
The most important thing is the way the goods are treated. No matter the product, they should be handled safely and correctly. Include all verbal agreements in the contract to make sure that things are clear. A smart move would be to send the other party an email in which you repeat what the exact agreements are. Ensure that the imported goods will arrive at their destination according all technical specifications, quality standards and with the agreed quantity.
If no deviations are detected and all final documents are received from both the selling and the buying company, a “Clean Report of Findings” is issued. This document declares that the content is harmless and that the shipment will pass the border without problems. In most cases this “Clean Report of Findings” only requires a final invoice and transportation bill (bill of lading or airway bill). Now the goods are ready to be imported.
As stated earlier, pre-shipment inspection is an essential part of importing goods. Although China’s announcement to remove some administrative approval procedures, importing demands a professional approach. All things considered, a pre-shipment inspection is complicated and companies should be aware of this.