By Eric Peterson | May 12, 2014
Rail repair equipment
Privately owned by the Chicago-based Steelhead Companies since 1997
Encore Rail Systems President Doug Delmonico has nearly 30 years of experience in the railroad business.
He saw an opportunity to reinvent the wheel in the mid-1990s, the wheel in question being the antiquated process to repair wooden railroad ties, a.k.a. tie plugging.
"It was all being done by hand back then," says Delmonico. He came up with ride-on tie-plugging machines that repaired wood ties with chemical compounds and started leasing them to railroad companies. "It allowed them to not just replace the ties, but fix them," he explains.
Then railroad giant CSX came calling, looking for a better way to repair the concrete seats below the ties. The concrete had a tendency to wear down and crumble more quickly than expected, especially on heavily used routes, and the status quo for repairs involved a time-consuming process with epoxy and stinky catalysts. "You could smell it curing a mile away," says Delmonico.
In 2002, Delmonico came up with a fast-set epoxy for the seats. The jump in productivity was remarkable: A crew formerly needed six or seven hours to repair a 1,446-foot "string” of railroad, but Delmonico's process brought that down to about 30 minutes. Considering the price tag on a railroad gang is upwards of $20,000 a day, it translated to major savings for the railroads.
"From there, we came up with the idea to put the epoxy in at the plant," Delmonico says. Starting at a Union Pacific facility in Tucson, Arizona, Encore began figuring out how to do just that, working with Denver-based EFI Polymers to develop an epoxy that cured with an assist from ultraviolet light. Then they tested the compound on 500 ties in Grand Island, Nebraska. "They run 100 million gross tons on those tracks a year," he notes, "which in railroad terms is quite a bit."
The resulting SpeedSet product passed tests for compression, elasticity, and abrasion with flying colors. "We played around with it and took it through its paces," Delmonico says. "It turned out to be really, really good."
Maintenance simply involves a blast of ultraviolet light. "Once it goes through the light, it's finished, says Delmonico. "It's done." Now six plants each make more than 1,000 of Encore's epoxy-imbued ties every day.
As of 2014, Delmonico has seven patents to his name and several more pending. The business model is based on leasing machines back to the railroads for maintenance and repair, providing them training and support, and selling them epoxies and other compounds.
Wood tie plugging continues to represent the majority of the business, and epoxy-based methods for the concrete ties and seats account for about a third of Encore's sales. Clients include Union Pacific, Kansas City Southern, and other national and regional railroads, as well as a number of industry vendors and contractors.
Next on the Encore Rail Systems agenda: "We're developing a new one," says Delmonico. "It's called the Autoplugger." The machine needs one operator instead of two and speeds up the plugging process substantially using computerized sensors, he explains, noting, "We've already got an order for 21 of them."
Challenges: Continuing to innovate in a staid industry. "As a whole, the railroad industry is one of the last industries to change," says Delmonico. "The work is still the same as it was 50 or 100 years ago. It's a lot of manual labor." He says Encore's mission is all about "finding new technologies that will make ours the best products out there."
Opportunities: Beyond the aforementioned Autoplugger, continued growth in a massive market. "There are 760,000 miles of mainline track in the United States," says Delmonico. "There are a lot of ties that need to be fixed." As rail is a global market, opportunities abound in other countries, he adds.
Needs: Capital. R&D costs are high for railroad vendors. "That is borne by us," says Delmonico. "It's not like the automobile industry. You don't have the ability to have a model out there and improve on it. You're really starting from scratch. You've got to have a lot of money."