Abstract
Freight transport policy analysts struggle to shift truck freight movements to rail to diminish transportation externalities including environmental costs and safety issues. Therefore, policy-makers need to be aware of the consequences of their decisions beforehand. This study is mainly focused on two policies targeting fuel price and access to rail transportation. A nation-wide freight mode choice model is developed for Iran, and shippers’ tendency to choose rail or truck freight transportation is analyzed by considering the shipping time and cost, commodity weight, commodity type, and rail accessibility. Total fuel consumption and air pollution costs are compared in various scenarios. Based on the results, environmental transportation costs are significantly reduced as a result of the modal shift from truck to rail freight transportation, if the government reallocates the gasoline subsidy to the construction of prioritized railroads.
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