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The Industrial Pre-Shipment inspection (PSI) article provides you with information about PSI services which are provided by third party inspection agencies.
Pre-shipment Inspection has two major applications as below:
First Application
The first application is used by buyers and sellers and when the commodities funds are transferred through letter of credits (LC), in which buyers and sellers banks are involved.
Then the commodities will be inspected before shipment by the independent third party inspection companies to verify quality, quantity, packing, marking and loading.
Several documents must be delivered to the seller’s bank for receiving the purchase value, such as the bill of lading, certificate of origin, packing list and inspection certificate.
So the inspection certificate is a document that must be issued by Third Party Inspection Company and delivered to the seller. The seller will refer to its bank to receive the funds by delivering the Inspection certificate and other related documents.
The placing of mandatory inspection requirements in the LC, depend on the buyer’s and seller’s decision and might be ignored by mutual agreement.
The second application is used by the government to safeguard national financial interests such as the prevention of capital flight through over invoicing and customs duty evasion.
The core service in the second application is goods price verification. The PSI companies have their own updated database for goods prices, and the prices which are declared by importers will be compared with the values in their database and will be reported to the governmental authorities, e.g. custom authorities or banks.
In this case, the government’s main aim is to prevent slippage of customs revenue as a result of undervaluation or deliberate misclassification by traders of goods to be imported under low-duty headings.
Review the following example to completely comprehend the pre-shipment inspection applications:
An oil company wants to order for design, manufacturing, procurement and installation of a gas turbine in its facility. The oil company makes a contract with the engineering company for design, supplying and installation of the gas turbine. The oil company opens a letter of credit with its bank for the engineering company.
Subsequently, the engineering company makes contract with the gas turbine manufacturer and requests from the bank for the “transfer LC.”
So in this LC:
The applicant and consignee will be the Oil Company, the first beneficiary will be the engineering company, and the second beneficiary will be the gas turbine manufacturer.
The clause number 46.A in all LC’s designated for the listing of necessary documents for any fund transfer between buyers and sellers. So for the above purchase, one item in clause 46.A will be:
“ The Original Inspection Certificate issued not prior B/L (Bill of Lading) date by M/S “name of third party inspection company” or its authorized agents on M/S “name of third party inspection company agents” letter heads certifying that:
“The quality, quantity and the packing of the goods loaded/delivered are strictly complying with specifications of the goods indicated in the related proforma invoice, the terms of LC and any amendments made thereto as presented to M/S “name of third party inspection company” by the buyer”
Please note in clause 46.A that there are lots of documents which must be delivered to the bank for payment, and the inspection certificate is one of them.
So the above wording in “bold” must be exactly stated in the inspection certificate. Even if there is a syntax error, it should be stated in same form.
Any change from the above wording will not be accepted by the bank and the funds will not be paid.
For example, if the equipment manufacturer did not notify the inspection company for the loading inspection and the commodity loaded without the witness of the preshipment inspection company, then what will happen?
The inspection company will issue an inspection certificate, but will remove the word “loading” from the above statement. But the consequences are that when the seller takes this certificate to the bank for receiving the payment, the bank will announce a discrepancy and will not pay to the seller.
The scope of inspection must be agreed upon between the Oil Company, engineering company and gas turbine manufacturer. The scope is normally summarized in the Inspection and Test Plan document.
For more details, review the Inspection and Test Plan article.
The ITP details the quality part of the inspection scope. The inspection company will make an inspection in each stage of manufacturing and will issue an Inspection Visit Report (IVR).
The engineering company must issue and submit the packing and marking procedure to the manufacturer or ask for a draft of the packing and marking procedure from manufacturer for approval.
In both cases, the inspection company must make an inspection based on the approved packing and marking procedures.
When the inspection company inspected the quality of the gas turbine, controlled the quantity and made an inspection on the packing and marking, then they will issue the inspection release note for shipment.
Then the gas turbine manufacturer can organize with the shipping company for shipment of the gas turbine. The inspection company must be notified for loading inspection.
The inspection company will witness the loading and will issue an Inspection visit report for loading.
Then the inspection company will issue the inspection certificate when they have received following documents from gas turbine manufacturer:
- Bill of Lading
- Certificate of Origin
- Packing List
The inspection company already received the Letter of Credit, Proforma Invoice and Purchase Order, so based on all of the collected documents; it will issue the pre-shipment inspection certificate and will deliver to the gas turbine manufacturer.
Then, the gas turbine manufacturer, with the inspection certificate and other required documents, will refer to its bank and receive the payment.
As stated in the opening of this article, sometimes the governments might use some services from pre-shiment inspection companies.
Second Application
In the above gas turbine example, it might be necessary that the gas turbine manufacturer’s proforma invoice to be approved by the pre-shipment inspection company (before issuing the purchase order by the engineering company) and make sure the price is not more than the value which is on the market.
Some government authorities try to avoid capital flight through this mechanism so safeguard national financial interest.
Pre-shipment inspection companies also are used to avoid customs duty evasion.
In the above example, the engineering company or gas turbine manufacturer’s local agent in the destination country is the importer and must submit a customs declaration document to clear the gas turbine from customs.
So a pre-shipment inspection company might be hired to make a price verification and determine the gas turbine custom duty.
Pre-shipment Inspection Related Articles:
Pre-shipment Inspection Services – This article provides you supplementary information about this content.
Commodity Inspection – This article provides you information about commodity inspection. The scope of work for commodity inspection is very similar to the pre-shipment inspection.
Preshipment inspection must be done before shipment, but in commodity inspection, the buyer and seller might agree to inspect the commodity in the destination country. When commodity inspection is not accompanied by vendor inspection, then precise attention must be paid to the document review. These documents are: quality control records, test reports, test procedures, material certificates, etc.
Goods Inspection – Goods inspection and commodity inspection have the same meaning and same definition and refer to the inspection of specific goods that a buyer purchases from a seller.
Finished Goods Inspection – The scope of work for finished goods inspection is very similar to the goods and commodity inspection. But shop or vendor inspections are never included in this scope of work.
Inspection of Packing – This article provides you information about inspection of packing, which is done in industrial goods before shipment and it is in the scope of the pre-shipment inspection.
Seaworthy Packing Procedure – This article provides you information about seaworthy packing procedure. The term seaworthy packaging is intended to indicate that the packaging must additionally strengthen and withstand the conditions of maritime transport and resist more severe stresses.
BS STD Packing Procedure – This article provides you information about BS STD Packing Procedure. The BS 1133-8:2011 Packaging code, Guidance on wooden boxes, cases and crates is most well-known and describes the comprehensive construction standards for boxes, cases and crates, which widely are used for packaging and shipment of industrial goods.
Quality Control in Packaging – This article provides you information about quality control in the packaging process of industrial goods before shipment. The quality control in packing process is the responsibility of the equipment and material manufacturer.
Container Shipping Seals -This article provides you basic information about container shipping seals. The objective in using these seals is to minimize the risk of unauthorized access into the container, which reduces the risk of cargo pilferage and the introduction of contraband.
Establishment Inspection Report – This article provides you information about the establishment inspection report.
When the third party or second party inspector carried out the inspection, then he/she must provide an inspection visit report to its customer. The inspection visit report must have some characteristics, which are explained here.
Certificate of Inspection – This article provides you information about the Certificate of Inspection (COI).
The third party inspection service provider company must issue an inspection certificate after finding satisfactory results during the inspection and when they have received the shipping documents from the seller.
This certificate has more commercial value than technical value and is a very important document in commercial transactions. This article explains the detailed content of the certificate.
Document Review is very important item in pre-shipment inspection assignment specifically when this inspection is not accompanied by vendor inspection.
In other word the purchaser order to the third party inspection agency is for doing pre-shipment inspection and there is no inspection during manufacturing process. In this case TPI inspector must pay more attention to control the quality control records.
As minimum the TPI inspector must check following documents for mechanical equipment Pre-Shipment Inspection assignment:
- Manufacturers Data Reports
- Material Certificates
- Dimensional Inspection Records
- Welding and NDE Maps
- WPS and PQR
- Welders Qualification Records
- NDE Reports
- Post Weld Heat Treatment Records
- Hydro-static Test reports
- Mechanical Running Test Reports (Rotary Equipment)
- Performance Test Reports (Rotary Equipment)
- NPSH Reports (for Pumps)
- Strip Down Test reports
When specified by purchase order, the TPI inspector must sign and stamp the above documents by special “Document Reviewed” stamp.
Executive Summary & Industrial Inspection Scope
In demanding industrial environments across Oil, Gas, Petrochemical, Offshore, and Heavy Process Infrastructure, rigorous compliance with ISO 17020, API Source Inspector, ASME is essential to ensure operational integrity, personnel safety, and compliance with statutory regulatory frameworks. This technical specification provides QA/QC managers, procurement engineers, welding inspectors, and third-party inspection (TPI) agencies with an authoritative, field-tested guideline for “Industrial Pre Shipment Inspection”.
Ensuring compliance regarding industrial pre shipment inspection services minimizes the risk of catastrophic asset failures, costly unscheduled shutdowns, and supplier non-conformances. The following technical sections delineate the scope of inspection, mandatory verification protocols, acceptance criteria, documentation deliverables, and root cause mitigation strategies.
Governing International Engineering Codes & Specifications
Verification and validation of Industrial Pre Shipment Inspection must strictly conform to the latest editions of the following international engineering codes and project specifications:
• **Primary Standard Reference:** ISO 17020, API Source Inspector, ASME
• **Quality Management & Inspection Systems:** ISO 9001:2015 & ISO/IEC 17020 (Requirements for the operation of various types of bodies performing inspection)
• **Material Compliance & Traceability:** EN 10204 Type 3.1 / 3.2 Inspection Certificates for metallic and non-metallic pressure-retaining components
• **Personnel Qualification:** ASNT SNT-TC-1A / ISO 9712 for NDT personnel, CSWIP 3.1 / AWS CWI for welding inspection, and NACE / AMPP Level 2/3 for coating and corrosion personnel
• **Statutory & Health Safety Directives:** ASME Boiler & Pressure Vessel Code (BPVC), API Standards, OSHA, and regional local authority regulations.
Step-by-Step Quality Control & Inspection Procedure
The execution of quality surveillance for Industrial Pre Shipment Inspection is structured across four progressive QA/QC intervention phases:
Stage 1: Pre-Inspection & Engineering Document Review (Review Point – R)
Prior to commencement of any physical activities or manufacturing operations related to Industrial Pre Shipment Inspection, the contractor or vendor must submit all technical submittals to the Owner or TPI agency for formal review and approval.
- Verification of approved Inspection and Test Plan (ITP) identifying all Hold (H), Witness (W), Review (R), and Surveillance (S) intervention points.
- Cross-examination of Material Test Reports (MTR / Mill Certificates) against standard design specifications (ISO 17020, API Source Inspector, ASME).
- Review and approval of specific Procedure Qualification Records (PQR), Welding Procedure Specifications (WPS), or calibration certificates.
- Verification that all measurement instruments, gauges, and NDT equipment hold valid calibration certificates from ISO/IEC 17025 accredited calibration laboratories (within 6 to 12 months validity).
Stage 2: In-Process Witnessing & Fabrication Control (Witness / Hold Point – W/H)
During the active execution phase, the certified inspector performs physical surveillance to ensure strict adherence to certified drawings, manufacturing procedures, and code tolerances.
- Verification of material traceability (heat number, heat treatment lot, plate number) transferred accurately onto fabricated components.
- Dimensional verification and visual inspection using calibrated gauges, micrometer depth dials, or laser alignment systems.
- Monitoring ambient environmental parameters (relative humidity, dew point, substrate temperature) when applying surface treatments, welding preheat, or pressure testing.
- Witnessing non-destructive examination (RT, UT, MT, PT, PMI) at specified percentages according to project critical rating and code requirements.
Stage 3: Final Acceptance, Pressure/Performance Testing & Marking (Hold Point – H)
The culminating milestone where the fully assembled or completed item is subjected to definitive acceptance tests in the presence of the Owner’s Third-Party Inspector (TPI).
- Execution of pressure proof tests (Hydrostatic at 1.3x to 1.5x MAWP or Pneumatic test) with dual calibrated pressure gauges and temperature recorders.
- Full visual inspection of completed surfaces, welds, protective coatings, and flange contact faces for absence of mechanical damage or code defects.
- Validation of permanent stamping, low-stress die markings, nameplate data verification, and barcoding in strict conformity with project specs.
- Clearing all open punch-list items, non-conformance reports (NCRs), and concession requests prior to issuance of the release note.
Stage 4: Packing, Preservation & Inspection Release (Inspection Release Certificate – IRC)
Ensuring the inspected equipment is adequately protected against atmospheric corrosion, mechanical shock, and marine transit degradation.
- Inspection of rust preventative coatings, desiccant bags, flange face blind protectors, and vapor corrosion inhibitor (VCI) packaging.
- Verification of heavy-lift sea fastening lugs, center-of-gravity markings, and export crating compliance (ISPM 15 wooden crating).
- Compilation and signing of the final Inspection Release Certificate (IRC / Shipping Release) and manufacturer data dossier (MDR).
Technical Acceptance Criteria & Tolerances Matrix
All measurements and physical characteristics must comply with the engineering tolerances and acceptance thresholds tabulated below:
| Inspection Parameter / Test Item | Applicable Standard & Clause | Permissible Tolerance / Acceptance Limit | Verification Method | Intervention Type |
|---|---|---|---|---|
| Material Chemical & Mechanical Verification | ISO 17020, API Source Inspector, ASME / EN 10204 3.1 | 100% compliance with minimum tensile, yield, elongation, and impact values (Charpy V-Notch at design temp) | Optical Emission Spectrometry (OES) / MTR Verification | Review (R) |
| Visual & Dimensional Tolerances | ISO 17020, API Source Inspector, ASME / Project Specs | Zero cracks, lack of fusion, severe pitting; dimensional tolerances within ±1.0mm to ±3.0mm per code drawings | Calibrated Vernier, Bridge Cam, Depth Micrometer | Witness (W) |
| Non-Destructive Examination (NDT) | ASME Sec V / ASNT SNT-TC-1A | 100% compliant with code acceptance criteria; zero planar defects or unpermitted volumetric indications | Radiographic (RT) / Ultrasonic (UT) / Magnetic Particle (MT) | Hold (H) |
| Pressure / Proof Testing (Hydrostatic) | ISO 17020, API Source Inspector, ASME / ASME Sec VIII | Test pressure maintained for minimum 30 to 60 mins; zero pressure drop, zero leakage or visible sweating | Dual calibrated Bourdon pressure gauges + Chart Recorder | Hold (H) |
| Surface Prep & Protective Coating Quality | SSPC-SP / NACE / ISO 8501 | Surface profile 50 – 75 µm; Dry Film Thickness (DFT) within 80/20 rule of specified nominal thickness | Replica Tape (ASTM D4417) & Magnetic Gauge (SSPC-PA 2) | Witness (W) |
| Nameplate & Final Preservation Verification | API / ASME / Client Specs | 316L SS nameplate securely affixed with correct design code, MAWP, design temp, and national board stamping | Physical visual check & VCI preservation verification | Hold (H) |
Mandatory QA/QC Dossier & Inspection Deliverables
Prior to the final issuance of the Inspection Release Certificate (IRC), the contractor and vendor must compile and submit the verified manufacturer data record containing:
- Approved Inspection & Test Plan (ITP) with sign-off stamps by Contractor, Client, and TPI.
- Material Test Reports (MTR / Mill Test Certificates EN 10204 Type 3.1 or 3.2).
- Certified Welding Procedure Specifications (WPS), Procedure Qualification Records (PQR), and Welder Performance Qualifications (WPQ).
- Calibration Certificates for all test instruments and measuring equipment (NABL / ISO 17025 accredited).
- Non-Destructive Examination Reports (RT, UT, MT, PT, PMI, Ferrite Content) evaluated by Level II/III inspectors.
- Heat Treatment & PWHT Time-Temperature Recorder Charts with thermocouple layout drawings.
- Hydrostatic / Pneumatic Pressure Proof Test Certificate with calibrated chart recorder logs.
- Surface Preparation and Protective Coating Inspection Reports (Daily environmental log, blast profile, DFT summary).
- Non-Conformance Report (NCR) and Concession Disposition Closeout Log.
- Official Inspection Release Certificate (IRC / Shipping Release Note) permitting packing and dispatch.
Common Non-Conformances & Field Mitigation Strategies
Based on extensive third-party inspection field records in oil & gas projects, the following deviations require heightened surveillance:
Defect / Hazard: Material Grade Substitution & Lack of Heat Traceability
Root Cause: Uncontrolled workshop storage, missing color coding, or unverified supplier sub-tier procurement without EN 10204 3.1 documentation.
Preventative Action: Enforce strict 100% Positive Material Identification (PMI) prior to cutting, and mandatory material receiving inspection with physical stamping cross-referenced to original mill test certificates.
Defect / Hazard: Out-of-Tolerance Fit-Up & Alignment Mismatch
Root Cause: Poor thermal cutting, thermal distortion from excessive preheat, or inadequate jigging and tacking arrangements.
Preventative Action: Establish a mandatory Witness/Hold point at joint fit-up before root pass deposition. Use calibrated Hi-Lo gauges to verify bevel angle, root face, and root gap according to the qualified WPS.
Defect / Hazard: Premature Coating Delamination & Blistering Under Film
Root Cause: Excessive soluble salt contamination (>20 mg/m²) left on the substrate, blast cleaning below dew point (<3°C above dew point), or oil/moisture in the blasting compressor air line.
Preventative Action: Perform Blotter Test (ASTM D4285) daily on compressed air, enforce Bresle patch chloride testing, and apply primer within 4 hours of abrasive blasting before rust blooming initiates.
Defect / Hazard: Pressure Drop During Final Hydrostatic Proof Testing
Root Cause: Micro-leakage through temporary test flange gaskets, entrapped air pockets inside vessel high points, or inadequate temperature stabilization.
Preventative Action: Ensure thorough venting at all high-point vents until bubble-free fluid emerges, allow minimum 15-minute temperature stabilization between filling medium and ambient metal, and torque all blind flanges with calibrated torque wrenches.
Frequently Asked Questions (FAQ)
Q: What are the mandatory qualifications for inspectors verifying Industrial Pre Shipment Inspection?
A: Inspectors must hold recognized international certifications applicable to the discipline. For welding and fabrication: CSWIP 3.1/3.2, AWS CWI, or API 510/570 Source Inspector. For NDT: ISO 9712 or ASNT SNT-TC-1A Level II minimum. For coatings: NACE / AMPP Level 2 or FROSIO Level III. Additionally, the inspection agency must operate under an ISO/IEC 17020 accredited quality management system.
Q: How does PtroTek resolve non-conformances (NCRs) encountered during vendor surveillance?
A: When a deviation from certified drawings or ISO 17020, API Source Inspector, ASME is detected, the inspector issues a formal Non-Conformance Report (NCR) within 24 hours. The vendor must submit a Root Cause Analysis (RCA) and proposed disposition (Rework, Repair, or Concession). Work on the affected component is halted (Hold Point) until the Owner’s engineering authority approves the disposition and a re-inspection confirms full compliance.
Q: What is the difference between Witness (W) and Hold (H) points in an Inspection & Test Plan (ITP)?
A: A Hold Point (H) is a mandatory milestone where fabrication or testing CANNOT proceed without the physical presence of the designated client or third-party inspector. Written clearance or stamping is strictly required. A Witness Point (W) requires prior notification (typically 24 to 48 hours) to the inspector; however, if the inspector fails to attend at the scheduled time, fabrication or testing may proceed with subsequent review of the test records.
Q: Can international clients review inspection reports and photos in real time?
A: Yes. PtroTek provides comprehensive Flash Reports issued within 24 hours of inspection completion, followed by detailed formal inspection reports accompanied by high-resolution calibrated photographic evidence, dimension logs, and signed vendor test records for complete global transparency.
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