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Who owns freight cars?

AAR notes that railroads own only a minority of many freight-car fleets, especially tank cars.

Cars may be owned by:

  • railroad,
  • shipper,
  • leasing company,
  • other private fleet owner.

Private cars have reporting marks/car numbers just like railroad-owned cars.

What is Umler?

Umler is Railinc's industry equipment register/data system.

It stores equipment characteristics used across the rail industry.

Private equipment needs accurate registered data for the industry to understand what the car is and whether it meets requirements.

What is OT-5?

AAR/Railinc Loading Authority (OT-5) is the process used for loading authority for private equipment on originating railroads.

At a high level, the controlling entity/owner/lessee identifies:

  • car numbers,
  • originating carrier,
  • loading location,
  • equipment information.

The originating carrier can review the application.

Why can an OT-5 request be rejected?

Railinc's OT-5 FAQ says the rejection reasons are limited to:

  • safety,
  • inadequate storage space,
  • mechanical factors.

That does not mean approval forces a railroad to use every submitted car in every circumstance; read the current AAR/Railinc rules and carrier requirements.

Private tank cars

Tank cars have additional AAR/PHMSA/FRA requirements.

Do not treat a tank car like an ordinary private boxcar.

Railroad-controlled vs private

Equipment ownership/control can affect whether OT-5 applies.

Railinc notes that certain cars with railroad marks/control may not be treated as private cars for the loading-authority process even if someone refers to them commercially as private equipment.

Why storage capacity matters

A railroad does not want hundreds of private cars sent to an origin that can only hold ten.

The OT-5 process therefore connects equipment authorization to actual loading locations/capacity.

Private-car economics

Possible costs:

  • lease,
  • maintenance,
  • repair,
  • mileage/car-hire arrangements,
  • storage,
  • repositioning,
  • inspections.

Private cars can improve supply control, but they create fleet-management work.

Empty routing

After unloading, the car still has to go somewhere.

Plan:

  • reload?
  • return to origin?
  • lease pool?
  • maintenance?
  • cleaning?

Empty miles matter.

When private cars make sense

Often:

  • dedicated commodity,
  • specialized car,
  • consistent volume,
  • need control over supply,
  • railroad car fleet unavailable/inappropriate.

Bottom line

Private railcar planning has three layers:

commercial ownership → industry registration → origin-carrier loading authority

Related:

Looking at private cars?

Send the car type, the commodity and the origin facility and we will help you understand what has to be in place before the first one is loaded.

Request a Freight Quote

References

  • Railinc OT-5 FAQ: https://public.railinc.com/sites/default/files/documents/FAQ_OT5.pdf
  • AAR OT-5 Circular: https://www.railinc.com/alf_docs/Circulars/OT-5.pdf
  • AAR Rail Operations 101: https://www.aar.org/operations-101/