Transportation industry is one of the main sources of pollution emission at present. To reduce environmental pollution in freight industry, it has become an important measure to guide freight flow from road transportation to rail transportation in view of the advantages of railway transportation in environmental protection. Therefore, this paper studies the choice of freight transport mode considering environmental cost under the competition between road transportation and rail transportation, where the environmental influence on share rate is quantified. The unit environmental cost is calculated by various pollutants emissions and cost factors and the unit time value of goods is calibrated via the Logit model. Aiming at the minimization of the total social cost composed of transportation cost, time cost and environmental cost, a choice model for freight transportation is then formulated. Taking the freight data of road network and railway network in Shandong as an example, the transportation mode and route selection schemes are discussed under different values of environmental cost coefficient. It is found that considering the environmental cost, the freight market share of railway transportation will increase, transportation cost and pollutant emission will decrease correspondingly.