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Policies and Directives
Effective August 1, 2002

Direct Hit Program

Definition

Direct hit shipments are those shipments where Canadian grains, oilseeds and/or pulses are transferred from trucks and/or railcars directly to a vessel without added processing. Included in this program are provisions for grains, oilseeds and pulses handled by direct hit through licensed terminal, transfer, and unlicensed bulk handling facilities.

Background

The Canadian Grain Commission (CGC) has been allowing direct hit shipments since the early 1980's. The first policy outlining the conditions under which direct hits were allowed was drafted in 1990, revised in 1991, and again revised in 1993. The direct hit process has changed over time and the 1993 policy is no longer valid.

This new program supersedes the former 1993 policy. Included herein are the requirements related to official inspection and weighing, the use of storage space, notification procedures, monitoring requirements, equipment requirements, certification, CGC fees, and the alternatives for meeting the general requirements.

Summary of General Requirements of the Direct Hit Program

  1. All direct hit shipments (offshore, continental U.S. and domestic market) must be officially inspected and weighed at the time of vessel loading.

  2. Grain destined for direct hit shipments cannot be stored in licensed terminals or bulk handling facilities.

  3. Shipments of grain will be monitored by the CGC while the grain is being unloaded from railcars/trucks to vessels. The shipper will be charged CGC monitoring fees at the applicable rate. If inward inspection and weighing have occurred, there is no extra monitoring charge.

Requirements of the Program

Inspection

Official inspection to the vessel is mandatory for all direct hit shipments including offshore exports, exports to the continental U.S., and shipments destined to Canadian domestic markets. This does not preclude a shipper from requesting additional CGC inspection services.

Weighing

Official weighing as grain is loaded to the vessel is mandatory for all direct hit shipments including offshore exports, exports to the continental U.S., and shipments destined to Canadian domestic markets. This option does not preclude a shipper from requesting additional CGC weighing services.

Until August 1, 2004, bulk handling facilities without CGC approved weighing equipment will be permitted to issue weight certificates (for registered and unregistered grains) based on unofficial weights. However, facilities must continue to obtain an order issued by the CGC permitting exemption from licensing requirements pursuant to the Canada Grain Act and its regulations. Bulk handling facilities without official weighing equipment must install CGC approved equipment by August 1, 2004.

Facility operators are required to provide the local CGC office with a record of unofficial weights of grain shipped by the direct hit method to ensure that accurate statistics can be maintained.

Storage

Grain destined for direct hit shipments cannot be stored in licensed terminals or bulk handling facilities. If grain goes into storage it must be inspected and weighed at inward as well as registered into general storage. This does not preclude grain that is in-store from being included as part of a direct hit shipment.

In the case of inclement weather conditions or vessel delays, the above requirements may be waived on a case-by-case basis. An appropriate fee will be charged. In circumstances where all of the stored grain cannot be loaded onto the nominated vessel, the residual grain must be immediately weighed, inspected and registered into general storage.

Notification

Facility operators or shippers must provide 48 hours advance notice of direct hit shipments to the Regional Director in the local CGC office. If a licensed terminal fails to provide advance notice, no direct hit services will be provided and the grain must be registered into common storage. If a bulk handler fails to provide advance notice, weighing and inspection fees will be doubled. In the case of inclement weather conditions on the day of a scheduled direct hit, the above requirements may be waived.

A carlot list is not required in advance. Operators are to provide a list of carlots and respective commodities upon time of direct hit unload. If problems arise due to inaccurate carlot documentation, the party responsible for sending the direct hit "Notice of Intent" will be charged the CGC resolution fee at the applicable rate. The resolution fee may include both a flat per car charge and hourly charges, depending on the type of CGC services required to render a solution.

Monitoring

Monitoring of direct hit shipments involves grain flow monitoring. Grain flow monitoring ensures that railcars carrying direct hit grain arrive full and leave empty.

Licensed elevators loading grain under the direct hit program will be required to lock out the grain flow path during the vessel loading process. Lock-out under this program refers to the securing of spouting, trips and other equipment which control grain flow patterns to ensure that grain travels directly to the vessel eliminating any potential for the mixing of unregistered grain with registered stocks. All lock-out procedures will be supervised or monitored by the CGC.

If no inward weight and grade have been requested, the appropriate monitoring fee will be assessed. If inward weight and grade have been requested, there is no extra monitoring charge.

Usually, only one employee is to provide the CGC monitoring services, but this may vary from facility to facility depending on the physical configuration of the premises and the specific methods of receipt and shipment. Fees will be assessed according to the number of employees required.

Equipment

All facilities where official inspection is provided must be equipped with automatic sampling systems approved by the CGC. In addition, all facilities handling grain requiring official weighing services must be equipped with weighing equipment approved by the CGC.

Inspection and weighing staff accommodation acceptable to the CGC must be available in which their respective duties can be carried out complete with communications equipment.

Certification

One certificate final is to be issued manually by local CGC staff for export, continental U.S., or domestic shipments that are officially inspected and weighed at the time of vessel loading.

In instances where uniformity is not achieved, one direct hit certificate will be issued manually by local CGC staff for export, continental U.S., or domestic shipments that are officially inspected and weighed at the time of vessel loading. This certificate allows for comments to be made on the weighing and inspection services and states: This certificate does not guarantee uniformity.

Direct Hit Fee Schedule

Official Inspection

$0.51 per tonne

Official Weighing

$0.27 per tonne

Monitoring

$28.20 per hour per person

Resolution Fee

flat rate of $50.00 per car plus $28.20 per hour per person for additional problems on the same vessel

Failure to provide "Notice of a Direct Hit" (bulk handlers only)

$1.02 per tonne plus $0.54 per tonne (double inspection and weighing fees)

Additional

overtime and travel

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Last updated: 2002-10-18

Important Notices