Warren Buffett says Berkshire’s railroad BNSF ‘disappointed’ in 2014

February 28, 2015, 1:00 PM UTC

One of Warren Buffett’s biggest investments had a disappointing year, at least according to Warren Buffett.

In his annual letter to shareholders, the Berkshire Hathaway CEO said that the story in 2014 for BNSF, the giant railroad company that Buffett’s insurance conglomerate bought in 2009, was “not good.”

“The railroad disappointed many of its customers,” writes Buffett.

The comments mark an about-face from last year’s letter, when Buffett compared the railroad’s cargo shipping prowess to that of Noah, the bible’s shipping superstar. “America’s rail system has never been in better shape,” Buffett wrote a year ago.

However, in the past year, BNSF has come under harsh criticism for a growing number of late shipments. Many railroad companies were hit with complaints last year, but BNSF appears to have received more than most. More than four dozen industry groups, law makers, and commodities firms lodged complaints with the U.S. Surface Transport Board about BNSF last year. Some even asked the regulator to take action against the railroad company.

Many have said the delays are probably due to a surge in demand from U.S. oil frackers, which are using railroads to move more and more of their output. And some have accused the railroad companies of bumping the shipment of other freight in favor of crude, which generally commands higher shipping rates. But BNSF says oil still accounts for a relatively small portion of its overall shipments. Still, the worst delays took place along the company’s northern routes, which run right through U.S. shale country.

Buffett says the weather, which was particularly harsh last year (remember the Polar Vortex?), played a role. But Buffett says the railroad should have done better. In his letter to shareholders, Buffett called attention to BNSF’s plan to spend $6 billion on improvements in 2015, which he said was 50% more than any other railroad has spent in a single year. Just the same, it’s only an increase of $1 billion from what BNSF spent in 2014 on new trains and track upgrades. And Buffett said the expenditures were already paying off. He said that BNSF’s performance metrics were significantly better in the fourth quarter than they were a year ago.

Buffett’s rebuke aside, BNSF didn’t spell disaster for Berkshire’s shareholders in 2014. The company earned nearly $4 billion, up 2% from a year ago. To be sure, that was much slower than the 13% jump in profits the railroad experienced the year before.

While Buffett had harsh words for BNSF, there is nothing in his letter about the labor disputes at Berkshire-owned NetJets, nor is there any mention about the other problems at Berkshire subsidiaries that have made headlines in the past year. In September, Fortune reported on the troubles Berkshire has encountered with paint company Benjamin Moore.

Overall, BNSF has been a very good investment for Buffett. Berkshire bought the company for $26 billion in 2009. Last year, BNSF had revenue of $23 billion and profits over the past three years of just over $11 billion. Buffett says BNSF now carries 15% of all inter-city freight, which he says is more than anyone else—by land, air, or sea.

Elsewhere in the letter, Buffett admits that he has made some acquisition mistakes. “Fortunately, my blunders normally involved relatively small acquisitions,” writes Buffett. “Our large buys have generally worked out well and, in a few cases, more than well.”

Watch more business news from Fortune:

Read More

CryptocurrencyInvestingBanksReal Estate