What is Industrial Vendor Inspection?

This article will talk about industrial pre-shipment inspection and will provide you with all the information related to PSI services which are offered by a third-party inspection company.

PSI has two major inspection application as given below:

First Application

The first application of the PSI services is used by both buyers and sellers when the funds for a commodity is transferred using LC(Letters of Credit), in which banks of both buyers and sellers are involved.

These product shipments will then be shipped before the shipment is sent to the third-party inspection company for verification of quantity, quality, marking, packaging, and loading.

Various documents should be sent to the bank of the seller for getting the final purchase value, like the bill of lading, inspection certificate, and certificate of origin.

The inspection certificate is the document which is issued by the third-party inspection company and delivered to the seller. Then the seller will refer to the bank to get their funds by showing the inspection certificate and various other related documents.

To place the important requirements in the LC, the decision for it depends on the buyer and seller and it cannot be ignored by mutual agreement.

The second application is used by the government to keep the safeguard of national financial interests like prevention of capital flight over custom duty and invoicing evasion.

The most important is the second application and is good for verification of prices. Moreover, the PSI companies have their own databases for price comparison and good prices which is finalized by the importers and their final value will be compared with their database. In addition, the final report will be given to the banks or customs authorities.

In such scenarios, the aim of the government is to avoid slippage of customs revenues because of the result of the evaluation or misclassification by trading goods which have to be imported under low-import duties.

LC includes:

The applicant and consignee will be the smartphone company, the first beneficiary will be the engineering company and the second will be the manufacturer company.

The clause in the LC includes offering all the necessary documents for funding the transfer between the buyer and seller. This is the most important clause companies should follow it.

The quality and the packaging of the product should strictly comply the standards as mentioned in the LC agreement by both first party and the second party. In case, it does not comply with the standards then the third-party inspection service company plays an important role.

Once the products are manufactured according to the compiled standards the LC will issue the inspection certificate. Then the buyer company can proceed forward with the payment to the seller company.

The inspection of the inspection should be agreed by both the companies, but it will remove the word “Loading” from the inspection certification.

After the third-party inspection company has checked the quality of the machine in which product shipment is manufactured, they will release the inspection note for the company stating that the product is safe to sell.

The third-party inspection service company will issue the inspection certificate when they receive the following documents from the manufacturer company:

  • Packaging List
  • Bill of Lading
  • Certificate of Origin


These were some of the main points why it is important to conduct industrial vendor inspection before the selling the shipment of the product.  Therefore, before selling the final product to the customer follow all the industrial vendor inspection services so that you can get the LC to sell the product quickly. These are very important points both every company like Pro QC (Quality control solution) should consider who are mostly into selling large bulk of product shipments.