At a conference in Sofia, Bulgaria, on 28 June 1956, the governmental ministers managing railway transport of Eastern bloc countries Albania, Bulgaria, Hungary, Vietnam, East Germany, China, North Korea, Mongolia, Poland, Romania, the USSR, and Czechoslovakia decided to establish a special inter-governmental organization, the executive body of which started operations in Warsaw, Poland, on 1 September 1957.

In 1990, OSShD consisted of 13 member countries (Albania, Bulgaria, Hungary, Vietnam, GDR, China, North Korea, Cuba, Mongolia, Poland, Romania, the USSR, and Czechoslovakia).

Additional, 17 commercial members joined, including: Siemens, Alcatel, Plasser & Theurer, Intercontainer-Interfrigo, Kolmex, and TransManche Link/Eurotunnel.

The OSShD defines success as the increase in freight volume that can be achieved both by direct investment in technical equipment, and by rationalization and improvement of existing procedures and services.

The freight and passenger volumes between Europe and Asia, and the major railway flows were defined within the implementation of this programme, taking into account the activities in Europe of UIC, UN, ECE Inland Transport Commission, and the Trans-European Main Line Railway Programme Agreements on international freight communications and the Carriages of Goods by Rail (CIM), and new rules on transporting dangerous freight prepared by OSShD based on UN recommendations and the Regulations governing the International Carriage of Dangerous Goods by Rail (RID).

OSShD has created various technical standards, which allow each company's equipment to be attached to others, as well as specification for initially freight vehicles and then passenger carriages which each member could order to ensure cost efficiency and interoperability.

In 1962 the East German railway company Deutsche Reichsbahn introduced a new generation of 24.5m four-axle coaches, termed OSShD Type B (OSShD-B), on "Görlitz V" bogies.