In an increasingly competitive national and global economy, shippers, carriers, and other business / industry stakeholders rely on a safe, efficient, reliable, and cost-effective freight transportation system. As a result, there is a growing awareness of the importance of freight transportation and a corresponding thrust at Federal, state, metropolitan, and local level. This paper discusses how freight mode and route choice is made to analyse travel behaviour of shippers for a varying range of commodities, dollar value and weight of shipment. Specifically, the paper addresses how freight mode and route choices are made in a travel demand modelling concept at national, state-wide and urban level. A discrete choice analysis methodology is adapted with critical factors such as the time value of money by type of commodity movement, attractiveness of a rail mode for long distance freight trips, and sensitivity of a freight trip to tolls. The probability of choosing a particular mode is the outcome from the discrete choice model. Then mode specific Origin-Destination matrices are computed. All vehicle classes are routed through the network by a multi-class user equilibrium assignment method. Freight Analysis Framework (FAF) data is used to analyze existing shipment, and a multinomial logit model is proposed consisting of seven freight modes and a number of FAF data derived independent variables. A nationwide highway and rail network, land use data, toll values and other travel demand data is collected and used in the proposed research. The mode choice model and multiclass assignment results in better truck trip assignment and well represent freight route choice. The model is applied in the state of Maryland, USA and the result shows that the proposed methodology can be used for larger level policy decision making objectives, such as project planning, corridor studies, and freight tolling. The state is facing issues of increase in freight demand because of Panama Canal expansion, opening of Northwest Passage, construction of freight alone corridor and addition of new freight rail tracks. The proposed methodology can serve as a tool to answer these policy questions.