This paper presents a novel damage detection technique, tailored at the identification of structural surface damage on rail structures. The damage detection, proposed in this paper, exploits the wave propagation phenomena (P, S, Rayleigh and guided wave velocities) by identifying discrepancies, due to damage presence, in the dynamic behaviour of the structure. The uncorrelations are generated by waves reflected back to the sensor locations by the flaw surfaces. The peculiarity of the presented approach is the use of a time frequency coherence function for the identification of the arrivals of guided wave reflected back to the sensors by the damage surfaces.The damage detection methodology developed was divided into three steps. In the first step, the presence of the damage on the structure was assessed. In the second step, the arrival time of the reflected wave (or echo) was estimated using the continuous wavelet transform. Then, the detection algorithm was able, through a ray-tracing algorithm, to estimate the location of damage.A numerical investigation of two single damages was carried out. The damage was introduced on the railhead surface to simulate rolling contact fatigue defects. The results showed that the proposed methodology can be used successfully to localise the damage location, however, as expected, the localisation is strongly affected by the frequency range used. The results suggested that the separation and the characterisation of single modes are crucial for the identification of different types of rail defects. Further work is needed to establish the damage severity by relating the magnitude of the changes of the time frequency coherence to reflection and attenuation coefficients of each guided wave used and on the selection of the best range of frequency according to the type of damage to be identified.