The Shippers and Ratepayers Who Have No AlternativeWide moat
Berkshire Hathaway (BRK.B) — moat facet
The most captive customers in this collection, which is worth less than it sounds because a regulator sets the price rather than the customer.
Two of Berkshire's largest businesses serve customers who cannot meaningfully shop elsewhere. A shipper moving bulk freight across the western United States has one or two railroads available and no economic alternative for most commodities. A household in Berkshire Hathaway Energy's service territory has exactly one electricity provider.
These are the most captive customer bases in this collection, and the capture is worth less than it sounds. Because these customers have no alternative, prices are not set by negotiation but by regulators — the Surface Transportation Board for rail, state utility commissions for power — whose statutory job is to allow a fair return and no more. Berkshire receives reliable, inflation-protected, capital-intensive returns in exchange for accepting a ceiling on them.
That trade suits Berkshire unusually well: it has more capital than opportunities, and regulated utilities absorb enormous sums at acceptable returns. It is also why the Union Pacific merger matters so much on the Competitors pages — a regulator persuaded that competition has been reduced can tighten the ceiling for everyone.
Watch allowed returns on equity in BHE's jurisdictions and BNSF's volumes against pricing. Captive customers make revenue predictable; regulators decide how much of it Berkshire keeps — and between them the railroad and the utilities contributed $49.8 billion of Berkshire's revenue in 2025, BNSF $23.5 billion and BHE $26.3 billion.1
Shippers and ratepayers remain captive, and regulators remain the counterparty that actually sets prices. The structure has not changed. The live question is whether a rail regulator persuaded that competition has been reduced by the Union Pacific merger responds by tightening the ceiling for every railroad, including BNSF.
Captive customers pay regulated or negotiated prices. BNSF revenue growth well ahead of volume would draw regulators' attention.
- ReportedCaptive customers make revenue predictable; regulators decide how much of it Berkshire keeps — and between them the railroad and the utilities contributed $49.8 billion of Berkshire's revenue in 2025, BNSF $23.5 billion and BHE $26.3 billion.Berkshire Hathaway Form 10-K, FY2025 - float $176 billion; after-tax earnings 2023-2025 (underwriting $7,258M, insurance investment income $12,513M, BNSF $5,476M, BHE $3,979M, manufacturing, service and retailing $13,647M in 2025; net earnings $66,968M incl. $30,737M investment gains and an $8,255M Kraft Heinz/Occidental impairment); revenues $371,444M; segment revenues (insurance $104,212M incl. premiums earned $88,902M and investment income $15,310M, BNSF $23,533M, BHE $26,297M, manufacturing $78,487M, service and retailing $42,647M, McLane $50,998M, Pilot $42,198M); pre-tax underwriting GEICO $6,824M, Primary $785M, Reinsurance $1,851M; GEICO combined ratio 84.7% (81.5%, 90.7%) and loss ratio 72.3%; capex $20,927M and D&A by segment; identifiable assets and goodwill by segment; 65% of equity fair value in five companies; equity securities $297.8B ($271.6B); BNSF volumes by business group; no share repurchases in 2025; no cash dividend since 1967; about 387,800 employees — FY2023-FY2025 · publ. March 2026 · source ↗