Pre-Shipment Inspection is or has become one of the compulsory formalities in exporting goods from Vietnam. It also confirms the quality and standard of the goods that the exporting country provides to the importing country. These inspections have been very helpful in the tendency of shielding the image of the exporting firms and avoiding complaints from the foreign consumers. However, since people are buying more products from Vietnam, the use of pre-shipment inspections is likely to grow as well.
Pre-Shipment Inspection Services: The Key Players
Pre-shipment inspection service providers are accredited inspection companies, which are mostly Third Party Inspection Agencies. The Ministry of Industry and Trade in Vietnam has granted these agencies the mandate to undertake inspection of exporters on their behalf. They check that the goods that are going to be exported in the country have the necessary quality standard and specifications of the importing country.
Some of the Third-Party Inspection Agencies include SGS, Bureau Veritas, Intertek, and TÜV Rheinland, among others in Vietnam. The mentioned inspection companies have their operational networks in the country and they have set up field offices for conducting the physical inspection of export products at exporters convenience.
Pre-Shipment Inspections: The Procedure
PSIs are normally carried out on the premises of the exporter, specifically in the factory or warehouse of the exporter. The inspection agency then dispatches an inspection team of which the head is the lead inspector and other technical specialists. The specific nature of the inspection procedure is effective for this purpose and the overall procedure normally takes 2-3 days.
The inspection procedure involves several steps:
- Sampling: The inspectors decide what part of the goods, which is to be inspected, should be taken as a sample. This is actually done to make certain that the samples taken are right for the complete consignment.
- Testing: A number of tests are then conducted on the samples; these include physical, chemical and mechanical tests. These tests are conducted in compliance with the International standards or the Standard prescribed by the importing country.
- Inspection: The inspectors also check the goods as to compliance with the appropriate specifications, drawings and samples.
- Report: Upon the completion of the tests, and inspection, the inspectors follow up with a report that contains test results, observations, and conclusions that have been made. This report is given to the exporter and from him it is passed on to the foreign buyer.
Pre-Shipment Inspection or PSI as it is often known hence becomes very important.
Pre-Shipment Inspections in Vietnam play a vital role in the export process, and they serve several important purposes:
- Ensuring quality: In its simplest form, Pre-Shipment Inspections (PSI) guarantee that exported goods conform to the standard and specifications of the importing country. This limits proper cause of actions and safeguards the image of the exporting company.
- Protecting the interests of the buyer: Pre-Shipment Inspections offer the buyer confidence that the goods they are buying are of the standard that they need. This is important in creating trust and thus long term business relationships in a business organization.
- Facilitating faster clearances: if a goods have been subjected to a pre shipment inspection, they are most likely to be processed and cleared faster in the port of entry. This assists the exporters regarding the payment of demurrage and detention charges and allows them to deliver goods in accordance with contractual agreements and commitments.
- Reducing risks: An analysis carried out in this study revealed that Pre-Shipment Inspections minimize export risk, including risks associated with quality, timely delivery of non-conforming goods, disputes, and penalties.
Conclusion
Vietnam’s consumers’ demand for PSPs in the Vietnamese market is likely to persist over the medium to long-run as Vietnam seeks to enhance its global competitiveness. Therefore, exporting companies in Vietnam will have to increase expenditure on quality assurance and inspection in order to meet the increasing customer demand. They may also need to consider investing in a company’s own inspection capacity to offset the costs of third party inspection. Thus there needs to be a standard rise in the manufacturing and quality assurance in Vietnam. This will help to minimize the risks involved in exporting goods and establish a reputable market for the Vietnam exporter’s market.
Therefore, PSI is an essential element in export business in Vietnam and it helps a lot to control the quality of products that are exported. Vietnamese exporters are required to spend on inspection right as they are the direction towards standardizing their manufacture and quality control in order to make a success of exports in the international market. That way they can minimize the risk of losing their reputations as well as establish better business relations with the foreign buyers.
