To circumvent the limitation posed by the traditional regional analysis tool, regional economists have turned using the more theoretical sound computable general equilibrium (CGE) models as a tool for policy and impact analyses. In the regional analysis applications how to model transport sector is of the special importance because that regions are relatively more open economies compared with nations. A central characteristic of transport is a joint product in most of domestic product. Terms of transport and transport policy thus have a more direct impact on trade flow. Two approaches have been developed to capture specific aspect of transport in the literature on international trade: iceberg modeling and explicit transport sector modeling. Special attention has been paid to iceberg modeling because of its simplicity; it is assumed that transport does not require any resource input directly. Owing its simplicity the iceberg assumption is used extensively for both in international and domestic trade modeling. Thus, we encounter a critical issue when we are concerned with the resource cost effect of transportation technology. The main purpose of this paper is to present a more general scheme for modeling transport as a separate sector in the contexts of CGE. To achieve this, we start with reformulation of Chenery-Moses type interregional input-output model from the viewpoint of microeconomic theory. While production activity at regional level is formulated as revenue maximization behavior, consumer behavior is modeled by maximizing a nested utility function that accounts for what commodities they purchase and from where they intend to import them. CES type utility function is assumed to generate interregional trade coefficient with interregional transportation costs. Transportation costs are then linked with the resource costs of transport technology along with the concept of the factor content. This modeling approach results in a fixed point problem for finding interregional trade coefficients consistent with given prices. Although general framework of our model is parallel to the conventional CGE model, however, our model allows the evaluation of resource cost effects and the prediction of changes in trade flow pattern as a consequence of the changes in transport technology and interregional factor movement.