The letters, known as reporting marks, indicate the owner of the car, while the number places it in the owner’s fleet. Reporting marks ending in X indicate ownership by a private company as opposed to a railroad.
In a process similar to granting “vanity” auto license plates, the Association of American Railroads assigns reporting marks. A car owner requests a set of letters, usually based on its name or initials. If the desired combination is already in use, or is otherwise unsuitable, the AAR and owner work together to find a substitute set of letters.
The field is more limited than you might think – the initials of motor, water, and air carriers are avoided, as are other railroads and car companies.
Official reporting marks may contain any letter of the alphabet, but not the ampersand (&), although the ampersands are often stenciled on the cars for clarity. Despite the proliferation of four-letter marks, particularly among short lines, the AAR has never required that reporting marks be four letters in length.
The AAR charges a $350 administrative fee to record a mark, which a car owner may retain indefinitely.
In mergers, the new company assumes rights to the old one’s reporting marks. The survival of “fallen flag” initials on many cars is the result of the long time it takes to restencil a vast car fleet.
Some owners, such as TTX Co., maintain several sets of marks so that families of cars with similar equipment may be readily identified.
The AAR encourages car owners to “retire” reporting marks when they no longer need them. A set of initials may be reassigned after it has been unused for 5 years.