Subnational levels of government, such as regional, state or local government units, develop and maintain physical infrastructures such as local roads, handle traffic management, and facilitate the implementation of national standards and guidelines at the local level. They are also responsible for formulating and ensuring the enforcement of policies applicable to the areas of their jurisdiction.

Subnational units of the government supervise and administer green freight initiatives within their territorial jurisdictions. In decentralized governance systems, responsibilities for determining physical infrastructure investments (e.g. roads, bridges, airports, ports) and for the delivery of key public services are devolved to sub-national governments. Because subnational governments have better knowledge of local conditions and are more accountable to their constituents, they can better respond to local needs and distribute the budget according to local priorities. They are also particularly important in managing urban freight.

Among the biggest challenges of subnational governments are financial resources and technical capacity in planning for and constructing the key capital facilities, and to implement and sustain comprehensive green freight programs. Because funding is primarily drawn from the national government, these subnational governments must administer subnational projects within the national budget. Moreover, green freight programs require cooperation among subnational governments, and between the subnational government and the national government.