Pre-shipment inspection, (also spelled preshipment inspecter) or PSI,its work is a part of supply chain management and an important quality control method for checking the quality of goods clients buy from suppliers.
PSI ensures that production complies with specifications of the buyer and/or the terms of a purchase order or letter of credit. A final random inspection (FRI), checks finished products when at least 80% of an order has been produced and export-packed. Samples are selected at random, according to standards and procedures.
Pre-shipment inspection can diminish risks inherent to Internet commerce like phishing and fraud.The pre-shipment inspection can be agreed upon between a buyer, a supplier, and a bank, and it can be used to initiate payment for a letter of credit. A PSI can be performed at different stages before shipment, such as checking the total amount of goods and packing, controlling the quality or consistency of goods, checking of all documentation, as for example test reports, packaging list, or verification of compliance with standards of the destination country like ASME, CE mark and import duties.citation needed date January 2015
PSI increases burdens and costs in international trade and can be counter-productive for the country of importation and its traders.
Several countries are considering termination on the use of inspection companies' service, following upon WTO Agreement on Trade Facilitation Article 10.5 Pre-shipment Inspection : 5.1. Members shall not require the use of pre-shipment inspections in relation to tariff classification and customs valuation.
In 1988, United Nations Economic Commission for Europe Recommendation No.18 - Recommended Measure 8.2 âDiscouragement of Pre-Shipment Inspectionâ.
"Customs use of inspection companies" World Customs Organization, (2015)