What is a pre-shipment inspection, and who performs it?
A pre-shipment inspection (PSI) is a third-party quality check carried out before goods leave the supplier, usually by independent firms such as SGS, Bureau Veritas, Intertek, or TUV. The resulting report can be mapped to a quality milestone so payment depends on the goods passing inspection.
A pre-shipment inspection is a quality check performed on finished goods before they are shipped, while there is still time to fix problems. It is normally done by an independent inspection body rather than by the buyer or seller, so the result carries more weight than either party own assessment.
What an inspection typically checks
Inspectors usually work from the purchase order, specification, and agreed standards, then sample the production run. The scope depends on the product, but common checks include the following.
- ·Quantity and packaging against the order
- ·Conformity to specification, dimensions, and tolerances
- ·Workmanship and visual defects, often by a sampling plan
- ·Function or performance tests where relevant
- ·Markings, labeling, and required documentation
Who performs it
Pre-shipment inspections are typically carried out by accredited third-party inspection and testing companies. Well-known international examples include SGS, Bureau Veritas, Intertek, and TUV, alongside many regional and specialist inspectors. The buyer and seller agree who inspects, against which standard, and what sampling plan applies, before the inspection takes place.
How it maps to a quality milestone
In a milestone-based deal, a passed inspection report can serve as the evidence for a quality milestone. When the report confirms the goods meet the agreed acceptance standard, that milestone is satisfied and the matching payment tranche can release; if it does not, the tranche stays held. On MPBxChange, contracts can tie a quality milestone to a passing inspection report so payment follows verified quality. MPBxChange does not perform inspections itself and is not a bank; it provides the contract, matching, escrow, and dispute layer and never takes custody of funds.
Frequently asked questions
It varies by deal. Often the buyer commissions and pays for the inspection because they rely on its result, but the parties can agree to share or shift the cost. The key point is that the inspector is independent of both sides.
No. A pre-shipment inspection is a commercial quality check arranged by the parties before shipping. Customs inspections are carried out by government authorities for import or export control and serve a different purpose.
Only if the contract is set up that way. When a quality milestone is tied to a passing inspection report, a confirmed pass satisfies that milestone and the matching tranche can release; otherwise the report is simply evidence the parties act on.