The Impacts of Biofuels on Transportation and Logistics in Indiana

Like the rest of the US, the ethanol industry in Indiana has rapidly expanded, growing from one plant in 2006 to a projected 13 by 2010. One result of this expansion is that truck and rail traffic flows in Indiana are shifting, as more corn and beans are processed in state. Most of the change in transportation requirements will likely be concentrated in regions of Indiana where the ethanol plants are constructed. The goal of this work was to determine how the entry of ethanol and biodiesel plants changes the inbound and outbound transportation flows of corn, soybeans, DDGS, and ethanol at the county level in Indiana between 2006 and 2010, focusing on modal and market shifts. The addition of 12 ethanol and 2 biodiesel plants from 2006 to 2010 increases total annual truckloads by 8%, but VMTs by 39%. This is due to fewer short hauls of corn and beans to local grain elevators replaced by longer hauls to ethanol plants. In addition, the movement of DDGS and ethanol is largely by truck. As more grain is processed within Indiana, less is shipped to out-of-state users by rail. However, outbound rail movements of ethanol and DDGS offset this somewhat. Finally, the changes in traffic flows are heavily concentrated in those counties with ethanol plants. As more ethanol plants are constructed, transportation requirements will change. Increases in the volume of truck traffic (more trucks and more miles traveled by each truck) will increase damage on local roads. This research identifies regions with large increases in truck traffic resulting from new ethanol and biodiesel plants. In turn, transportation planners can anticipate a reallocation of maintenance budgets to maintain key highways and bridges.