Introduction
Pre-shipment inspection — usually abbreviated PSI — is the last independent checkpoint on a production run before the buyer releases the balance payment. Skipping it is where most preventable quality disasters happen.
This article covers what to inspect, when to book, and how to read the report.
What Pre-Shipment Inspection Is
PSI is a physical inspection of finished goods, conducted by a third-party inspector (or a sourcing partner acting in that role), at the factory, before shipment. The inspector opens a statistically-sampled portion of the shipment and checks against a written quality standard.
The output is a written report with photos, defect counts, and a pass / fail conclusion.
When To Book PSI
Book PSI when production is complete but before the balance is paid — typically when the factory reports 100% production and 80% packaging.
Booking too early means goods are not ready. Booking too late means the container is loaded and defects can no longer be economically corrected.
What The Inspector Checks
A standard PSI covers:
- Quantity verification — actual units produced versus purchase order
- Product conformity — physical inspection against the approved sample and specification
- Workmanship — defect counts against agreed AQL (Acceptable Quality Level) standards
- Functional testing — if applicable, sample units are powered on, opened, or otherwise tested
- Packaging — retail packaging, cartons, labels, barcodes
- Loading verification — if the shipment is loaded during inspection, container photos and seal number
The specific checks depend on what the buyer requests, which is why a written inspection brief matters.
Understanding AQL
AQL sampling determines how many units get inspected from a shipment. AQL 2.5 (a common standard) means the inspector expects at most 2.5% major defects. Below that, the shipment passes. Above that, it fails.
Different products need different AQL levels. Low-risk consumer products use AQL 2.5 major / 4.0 minor. Higher-risk products (electronics, cosmetics) use tighter AQL. Set the level in advance, not after inspection.
Reading The Inspection Report
A good PSI report includes:
- Photos of the physical goods, packaging, and any defects found
- A defect table categorised as critical / major / minor
- A pass / fail conclusion based on the agreed AQL
- Container loading photos and seal number if applicable
- Any observations the inspector considers worth noting
If the report is thin — few photos, no defect categorisation, generic pass — treat it with scepticism.
What To Do When PSI Fails
A failed PSI report is not a disaster. It is exactly what PSI is for.
Standard responses:
- Rework — supplier fixes the defective units before shipment
- Sorting — supplier removes defective units and ships only good ones
- Partial acceptance — ship the good units, credit or replace the rejected ones
- Full rejection — supplier reworks the entire batch
The buyer’s leverage is highest before the balance is paid. That is the leverage PSI creates.
FAQ
How much does pre-shipment inspection cost? $200–400 per inspection day, depending on the inspection company and location. Most orders complete in one day.
Can the factory do the inspection themselves? Factory self-inspection is not the same as third-party PSI. The factory has an incentive to ship; the third-party inspector does not.
Is PSI necessary on every order? For any order value above a few thousand dollars, yes. The inspection cost is small compared to the shipment value.
Add Inspection To Your Next Production
The order where you skip inspection is usually the order you learn why inspection matters. If you would like Hansen to arrange inspection, see China Quality Control or start a project.