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What Is Pre-Shipment Inspection?

PSIs are usually required when a letter of credit is requested before international shipping.
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  • Written By: Kristie Lorette
  • Edited By: O. Wallace
  • Last Modified Date: 16 October 2014
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A pre-shipment inspection is also known as a PSI. When companies, government agencies or organizations ship goods or tangible products to clients, customers or other organizations, they conduct a pre-shipment inspection to check for various items about the shipment. Primarily, they are checking for quality and accuracy of the order or that the shipment includes the goods or products that the shipment is supposed to contain. Essentially, it is a final inspection of the shipment to check for quality control and accuracy before it goes out the door.

In international shipping situations, a pre-shipment inspection may be required to adhere to a letter of credit. When American companies deal with international companies, a letter of credit is often created to protect the monetary interests of the buying party, as a guarantee that the products being ordered adhere to the order prior to the bank releasing the funds the selling company.

For many companies, a pre-shipment inspection is part of its quality control process. Having someone check the invoice or order slip with the items that are in the box helps to ensure customers will be satisfied when they receive their orders. If companies take this one extra step to ensure the quality of its orders, it typically reduces the amount of returns and boost repeat orders from the same customers.

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A pre-shipment inspection also protects the company against damage claims if products are damaged during transit. If the shipping company verifies that the products in the order are not broken or damaged prior to leaving the warehouse, then it becomes the responsibility of the shipping company if something happens to the products inside of the box or if the shipment is lost altogether.

Some companies use pre-shipment inspections as a form of quality management or quality control, or as learning experience. For example, if the person or people responsible for conducting the pre-shipment inspections notice that the same mistakes keep occurring, then steps can be put into place to increase the quality of shipments and reduces the times an inspector has to return the package or shipment to the fulfillment area to be corrected.

Something else pre-shipment inspections may check for are that the package is properly packed. This includes ensuring that the products are arranged to reduce the chance of damage and that there is package cushioning to protect the products from damage or being jostled during shipping.

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