Knowledge management (KM) is a planned, structured approach of systematically and actively managing ideas, information, and knowledge of employees, and it could be an important component for accelerating an organization towards sustainability. The concept of freight village (FV) is developed from a sustainability-oriented perspective, which is playing an important role in the trend of pursuing sustainable logistics industry. This paper seeks to adopt the KM as an aid to addressing sustainable development of freight villages (FVs). On the basis of operative functions, two knowledge flows functioning in the context of a sustainability-oriented FV have been described, which named internal knowledge flow and supportive knowledge flow. Then, a mode of interacting processes is proposed to clarify that KM are improving the sustainability level of a business organisation on different layers. Finally, a KM framework conducting FVs for their sustainable development is provided. The tasks and characteristics of knowledge application at three levels of sustainability-oriented FVs are also detailed in this paper.