Industrial Commodity Inspection Services

This article explains about commodity inspection services and covers fixed, rotataing, electrical and instrument equipment. This article provides you with information about the services that are provided by third party inspection companies.

This article is a supplementary article for the Commodity Inspection article. It is recommend that you first read the commodity inspection article, and then come back here for supplementary information:

Commodity Inspection Process

The process for commodity inspection is described in the Pre-Shipment Inspection article. Here is an outlined list to apply for Commodity Inspection:

  • Selection of a third party inspection agency by the purchaser, along with an agreement for doing a commodity inspection for a specific purchase order
  • Introduction of third party inspection agency to the bank (purchaser bank which opens LC)
  • Submission of the purchase document to the commodity inspection company, such as the letter of credit, purchase order, proforma invoice, purchase technical specification, drawing, etc.
  • Introduction of third party inspection company to the seller
  • Draft notification to be sent by the TPI to the vendor to be filled out and returned to the TPI
  • Preparation for inspection by the seller and submission of the inspection notification to the third party inspection company
  • Execution of the third party inspection and submission of the inspection visit report and non-conformity report(if any)
  • Issuance of an inspection release note by the third party inspection agency if the result of inspection was satisfactory
  • Arrangement with shipping company made by seller and third party inspection agency notified for witnessing the loading
  • Submission of the shipping document to the third party inspection company by seller
  • Issuance of the certificate of inspection by the third party inspection company and submission to the seller

This might be a little different based on the trading rules and regulations of each country or when there is no mandatory requirement in terms of the LC for third party inspection.

Commodity Inspection Services Document

The following are the list of documents that are used for commodity inspection:

  • Proforma Invoice
  • Purchase Order
  • Letter of Credit
  • Packing List
  • Certificate of Origin
  • Purchase Order Specification
  • Material Requisition List
  • Bill of Lading
  • Inspection Visit Report
  • Certificate of Inspection

Commodity Inspection for Import and Export

Commodity inspection for import and export is sometimes a mandatory requirement of the governmental authorities and need to be done to fulfill the requirements. For more detail, review the Pre-Shipment Inspection Services article.

Sometimes it is done because of the terms of LC for commodity inspection, which is normally requested by buyers.

In the other cases, the importer might request for commodity inspection optionally to be sure the commodity they are receiving to their site is to the purchase order specification.

Commodity Inspection Services Report

When a third party inspector carries out the inspection, he/she must provide a detailed report, called an inspection visit report. This reports needs to cover all items that are specified in the purchase documents and inspection and test plan. For more information, review the Establishment Inspection Report article.

Commodity Inspection Services - Commodity Inspection Law

These would depend on the rules and regulations of each country, but the World Trading Organization member countries are to follow WTO Pre-Shipment Inspection Agreement. For more information, review the Preshipment Inspection Services article.

Commodity Inspection Services - Commodity Inspection Fee / Contract

The Commodity inspections fee is normally paid by the purchasers, but sometimes the purchasers ask the vendors or sellers to consider the inspection fee in their proforma invoice. In this case, the fee would be paid by the seller.

The fee is different from one country to another and in most cases, it is based of the man-day plus mileage fee.

When the purchase value is great, some purchasers ask inspection companies to quote them based on a percentage of the purchase order value.

Commodity Inspection Services - Certificate of Commodity Inspection

When a third party inspector carries out the inspection and the result is satisfactory, then depending on the purchase order, the inspection certificate for commodity would be issued by the third party inspection agency.

If there is a letter of credit in place and inspection is mandatory by the terms of the LC, the inspection certificate needs to be issued after shipment and when the third party inspection agency receives the shipping documents.

If there is no LC between the buyer and seller, or there is an LC, but without mandatory requirements for inspection, then the inspection certificate might be issued based on the agreement of the buyer and seller. Sometimes, in this case, there is no need for a certificate and an inspection visit report would be enough.


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