As indicated in the Basic Features of the SCTG link, each product classification in the Standard Classification Transportable Goods (SCTG) is based on building blocks from the Harmonized Commodity Description and Coding System (HS) product classifications, or on product classifications from the Standard Classification of Goods (the SCG, Canada's extension of the HS).
The HS and SCG provide thousands of categories from which to select for the purpose of developing the SCTG. To create a product classification that would be useful for transportation analysis (i.e., a code with between 500 and 600 detailed product classifications), only a fraction of the product classifications and product categories in these two codes could be used without being combined with other product classifications.
To winnow down the number of HS and SCG product classifications, the SCTG development team employed several criteria. The most important of these was importance to transportation analysis.
Specifically, HS and SCG building blocks were organized to form detailed product classifications that would have signficance based on the product shipment characteristics of weight, value, and shipment distance. The SCTG development team used a number of different U.S. and Canadian freight data sources to assess the significance of SCTG product categories.
Other important criteria used to create the SCTG include the following:
When constructing the SCTG product codes, the code development team tried as much as possible to keep HS and SCG building block codes from the same HS/SCG chapters together with one another (e.g., all codes in HS chapter 56 kept together, all codes in HS chapter 57 kept together, etc.) In areas where this goal clashed with other classification criteria, the SCTG development team reached a consensus decision regarding reorganization. As a result, reviewers will note that, for example, motor vehicle engines have been separated from other engines in HS Chapter 84 and placed with motor vehicle parts and accessories from HS Chapter 87. A similar re-organization has taken place for waste and scrap materials, which have been separated from their HS chapters of origin and collected together at the end of the SCTG.
As much as possible, SCTG codes were designed to be comparable with categories in the Standard Industrial Classification (SIC) and North American Industrial Classification System (NAICS) industry classification codes. SCTG two-digit codes were specifically designed to be comparable with the two-digit levels of the SIC and the NAICS. SCTG five-digit codes were also created with an eye to comparability with industries of origin, but comparability of products to industries of origin was NOT an over-riding concern. As reviewers may note, a number of product categories (especially residual categories) contain goods produced by more than one industry.