Using densified biomass to produce biofuels has the potential to reduce the cost of delivering biomass to biorefineries. Densified biomass has physical properties similar to grain, and therefore, the transportation system in support of delivering densified biomass to a biorenery is expected to emulate the current grain transportation system. By analyzing transportation costs for products like grain and woodchips, this paper identifies the main factors that impact the delivery cost of densified biomass and quantifies those factors’ impact on transportation costs. This paper provides a transportation-cost analysis which will aid the design and management of biofuel supply chains. This evaluation is very important because the expensive logistics and transportation costs are one of the major barriers slowing development in this industry. Regression analysis indicates that transportation costs for densified biomass will be impacted by transportation distance, volume shipped, transportation mode used, and shipment destination, just to name a few. Since biomass production is concentrated in the Midwestern United States, a biorefinery’s shipments will probably come from that region. For shipments from the Midwest to the Southeast US, barge transportation, if available, is the least expensive transportation mode. If barge is not available, then unit trains are the least expensive mode for distances longer than 161 km (100 miles). For shipments from the Midwest to the West US, unit trains are the least expensive transportation mode for distances over 338 km (210 miles). For shorter distances, truck is the least expensive transportation mode for densified biomass.