The decarbonizing efforts of freight transport faces several challenges. According to the most recent reports the measures and initiatives to divert road freight to rail very often fails. One of the key decision making issue is the rail service quality. However, only very few papers discuss the mode and route choice factors in details because of the complexity of decision making and the lack of information about the operator companies decision making. As part of the rail freight strategy of Hungary we made exhaustive research on the decision making factors and set up a new line costing model for rail that can be used in cost(skim) matrices for mode and rout e choice. This model could calculate with the rail freight related operational environment factors and take into account the impedance changes caused by traffic volumes. In addition, a specific service level indicator is considered in the calculations. The detailed impedance calculation applies a two-fold approach. It was benchmarked against real route data in Hungary and proved to be realistic. The results can be used in strategic capacity planning and contribute to the efficient management of the network.