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26 constitute a small percentage of the statewide highway net- digits, although this level of detail is primarily used by the car- work. riers in setting rates and little volume information is available Some components of freight models are typically not vali- at this level. The STCC system also is compatible with the SIC dated since the only data available was used to develop the industrial classification system discussed below, while the model and no independent data are available for validation. SCTG is not completely consistent with the SIC or the For some industries it may be possible to find alternate NAICS. information on production, and sometimes consumption for A correspondence table between the STCC and SCTG sys- a particular market. Specific state agencies, such as agricul- tems, at the two-digit level, is shown in Appendix A. At this ture, mining, or forestry departments, may maintain annual hierarchical level there is considerable overlap between the production information, particularly for sectors of the econ- two systems. omy with significant levels of activity within the State. Industry- specific trade associations also may compile this type of Industry Classification information. However, in many instances these agencies will disseminate statistical information that comes from Federal Industry classifications are similar to commodity classifi- government sources, or the other primary sources commonly cations. Historically, the United States has reported economic used in freight forecasting and modeling. industry data using the SIC. SIC has being replaced with the new NAICS. SIC codes are numerical codes that group companies that 5.6 Classification Schemes produce similar products or services. SIC codes are arranged The data sources used in freight forecasting report on ship- in a very structured, hierarchical manner. The first digit iden- ments by commodity and their associated industries using tifies a major Economic Division, such as 2-Nondurable different classification schemes. Understanding these schemes manufacturing. The second digit identifies an Economic is necessary to properly utilize the data. Additionally, some Major Group, such as 20-Food and kindred spirits. The third models may require the use of multiple data sources based on digit identifies an Industry Group, such as 202-Dairy prod- different classification schemes. Understanding the relation- ucts. The fourth digit identifies a Specific Industry, such as ships between the alternate coding systems is essential to prop- 2024 Ice Cream and Frozen Desserts. erly integrate the information. The United States has started collecting data using the NAICS codes. While similar in approach, the NAICS codes cover a much wider variety of industries, technologies, prod- Commodity Classification ucts and services, particularly new, emerging, and advanced There are two primary commodity classification schemes. technology industries. NAICS reorganizes industries into cat- Prior to the 1997 CFS , U.S. freight data was collected and egories that reflect the service-oriented economy. The NAICS reported using the STCC code. This classification code was codes are detailed up to six digits. The correspondence developed in the early 1960s by the American Association of between the SIC and NAICS codes exists only at the four-digit Railroads to analyze commodity movements by rail. It also is SIC and six-digit NAICS level. The NAICS is a joint effort of the reporting system that continues to be used in the STB's the United States, Canada, and Mexico and will make it eas- Carload Waybill Sample. The United States and Canada have ier to compare U.S. industrial statistics with economic data adopted the SCTG and this system was used in reporting the from other countries. 1997 and subsequent CFSs. SCTG is similar to the Harmo- The SIC hierarchical structure matched that of the STCC nized Schedule classification, which is the predominant prod- commodity classification system, making it easy to compare uct coding system currently in use worldwide. However between industrial activity and commodity shipment. Since much of the available commercial freight economic data are the NAICS was only introduced in 1997, historical data in available using the older STCC codes. that system is lacking. While U.S. government information is STCC codes are numerical codes that group similar prod- only available in the NAICS, many private users of industry ucts, and the codes are arranged in a very structured, hierar- and employment data, particularly private data providers still chical manner. The first digit identifies a major Economic use the SIC system. A correspondence table between the SIC Division, such as 2-Nondurable manufacturing. The second and NAISC systems, at primarily the two-digit level, is shown digit identifies an Economic Major Group, such as 20-Food in Appendix A. The exception is in NAICS categories 31-33 and kindred spirits. The third digit identifies an Industry Manufacturing, 44-45 Retail Trade, and 48-49 Transporta- Group, such as 202-Dairy products. The fourth digit identi- tion and Warehousing which are distinguished only at the fies a Specific Industry, such as 2024 Ice Cream and Frozen three-digit level. At this hierarchical level there is consider- Desserts. Additional detail is provided through up to seven able overlap between the two systems.