The workings of most customer-driven or international multi-echelon supply chains are not accurately captured by existing freight transport models. Freight mode choice is among the most important logistics decisions that are incorporated in recent freight modeling methods. This transportation decision should take into account the trade-offs between transportation and inventory costs in a particular supply chain network. The characteristics of the commodity, such as price, demand pattern, physical nature, and packaging have a great impact on freight behavior and logistical decisions such as mode choice. For instance, high value innovative products can readily absorb transportation costs, whereas low value functional products may be priced out of the market if they cannot use the most efficient and inexpensive transportation mode. Accounting for the effects of commodity characteristics on transportation and logistics costs might considerably change the choice of mode. The approach used in the development of the Florida Freight Supply-chain Intermodal Shipment (FreightSim) represents a practical step forward to representing logistics behavior of shippers, carriers and 3rd party logistics firms in transporting goods. The FreightSim model employs a series of sequential model components to predict shipments of goods moving into, out of, and through Florida, by mode. As part of the mode choice component of this model, a mode and path (from a set of feasible modes and paths) is chosen based on the annual transport and logistics cost calculated for each pair of buyer and seller considering supply chain and inventory control costs. This paper focuses on the total transport and logistics cost equation and how it was used in the mode choice model. The paper includes a brief description of the FreightSim model, including a discussion of the mode choice component of the model. Mode choice model calibration and validation results are also presented.