You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and related notes.

Forward-looking Information

Our quarterly report on Form 10-Q, including this discussion and analysis of our financial condition and results of operations and our disclosures about market risk, contains certain "forward-looking statements." These statements represent our expectations, beliefs, intentions, or strategies concerning future events and by their nature involve risks and uncertainties. Forward looking statements include, among others, statements about our future performance, the continuation of historical trends, the sufficiency of our sources of capital for future needs, the effects of acquisitions, the expected impact of recently issued accounting pronouncements, and the outcome or effects of litigation. Risks that could cause actual results to differ materially from our current expectations include changes in market demand and pricing for our services; the impact of competition, the impact of higher fuel prices, changes in relationships with our customers, freight levels and our ability to source capacity to transport freight, our ability to source produce, the risks associated with litigation and insurance coverage, our ability to integrate acquisitions, the impacts of war, the risks associated with operations outside the United States, risks associated with the potential impacts of changes in government regulations, risks associated with the produce industry, including food safety and contamination issues, and changing economic conditions. Therefore, actual results may differ materially from our expectations based on these and other risks and uncertainties, including those described in Item 1A. Risk Factors of our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2007, filed on February 29, 2008.

Overview

Our Company

We are a global provider of multimodal transportation services and logistics solutions, operating through a network of branch offices in North America, Europe, Asia, and South America. We are a non-asset based transportation provider, meaning we do not own the transportation equipment that is used to transport our customers' freight. We work with approximately 48,000 transportation companies worldwide, and through those relationships we select and hire the appropriate transportation providers to meet our customers' needs. As an integral part of our transportation services, we provide a wide range of value added logistics services, such as supply chain analysis, freight consolidation, core carrier program management, and information reporting.

In addition to multimodal transportation services, we have two other logistics business lines: fresh produce sourcing and fee-based information services. Our Sourcing business is the buying, selling, and marketing of fresh produce. We purchase fresh produce through our network of produce suppliers and sell it to retail grocers and restaurant chains, produce wholesalers, and foodservice distributors. In many cases, we also arrange the transportation of the produce we sell through our relationships with specialized transportation companies. Our Information Services business is our subsidiary, T-Chek Systems, Inc., which provides a variety of management and information services to motor carrier companies and to fuel distributors. Those services include funds transfer, driver payroll services, fuel management services, permit procurement, and fuel and use tax reporting.

Our Business Model

We are a service company. We act principally to add value and expertise in the procurement and execution of transportation and logistics, including sourcing of produce products for our customers. Our gross revenues represent the total dollar value of services and goods we sell to our customers. Our gross profits are our gross revenues less the direct costs of transportation, products, and handling, including motor carrier, rail, ocean, air, and other costs, and the purchase price of the products we source. Our gross profits are the primary indicator of our ability to source, add value, and sell services and products that are provided by third parties, and we consider them to be our primary performance measurement. Accordingly, the discussion of our results of operations below focuses on the changes in our gross profits.

We keep our business model as variable as possible to allow us to be flexible and adapt to changing economic and industry conditions. We buy most of our transportation capacity and produce on a spot-market basis. We also keep our personnel and other operating expenses as variable as possible. Compensation, our largest operating expense, is performance-oriented and, for most employees in the branch network, based on the profitability of their individual branch office.

In addition, we do not have pre-committed targets for headcount growth. Our personnel decisions are decentralized. Our branch managers determine the appropriate number of employees for their offices, within productivity guidelines, based on their branch's volume of business. This helps keep our personnel expense as variable as possible with the business.

Our Branch Network

Our branch network is a major competitive advantage. Building local customer and carrier relationships has been an important part of our success, and our worldwide network of offices supports our core strategy of serving customers locally, nationally, and globally. Our branch offices help us penetrate local markets, provide face-to-face service when needed, and recruit contract carriers. Our branch network also gives us knowledge of local market conditions, which is important in the transportation industry because it is dynamic and market-driven.

Our branches work together to complete transactions and collectively meet the needs of our customers. In 2007, approximately 30% of our truckload shipments were shared transactions between branches. For many of our significant customer relationships, we coordinate our efforts in one branch and rely on multiple branch locations to deliver specific geographic or modal needs. In addition, our methodology of providing services is very similar across all branches. Our North American branches have a common technology platform that they use to match customer needs with supplier capabilities, to collaborate with other branch locations, and to utilize centralized support resources to complete all facets of the transaction.

We have opened three branches in the first half of 2008, and are planning to open two to five more by the end of 2008. . Because we usually open new offices with only two or three employees, we do not expect them to make a material contribution to our financial results in the first few years of their operation.

Our People

Because we are a service company, our continued success is dependent on our ability to continue to hire and retain talented, productive people. Our headcount grew by 288 employees during the second quarter of 2008. Branch employees act as a team in their sales efforts, customer service, and operations. A significant portion of our branch employees' compensation is performance-oriented, based on individual performance and the profitability of their branch. We believe this makes our sales employees more service-oriented, focused, and creative. In 2003, we implemented a restricted stock program to better align our key employees with the interests of our shareholders, and to motivate and retain them for the long term. These restricted stock awards vest over a five year period based on the performance of the company, and have been awarded annually since 2003.

Our Customers

In 2007, we worked with approximately 29,000 customers. We work with a wide variety of companies, ranging in size from Fortune 100 companies to small family businesses, in many different industries. Our customer base is very diverse. In 2007, our top 100 customers represented approximately 32% of our total gross profits, and our largest customer was approximately 3% of our total gross profits.

Our Carriers

Our carrier base includes motor carriers, railroads (primarily intermodal service providers), air freight, and ocean carriers. In 2007, we increased our carrier base to approximately 48,000. While our volume with many of these new providers may still be small, we believe the growth in our contract carrier network shows that new transportation providers continue to enter the industry, and that we are well positioned to continue to meet our customers' needs. Approximately 75% of our truckload shipments in 2007 were transported by motor carriers that had fewer than 100 tractors. In our truckload business, no single carrier represents more than 1% of our carrier capacity.

Our Goals

Since we became a publicly-traded company in 1997, our long-term compounded annual growth target has been 15% for gross profits, income from operations, and earnings per share. Although there have been periods where we have not achieved these goals, since 1997 on a compounded basis we have exceeded this growth goal in all three categories. We expect to reach our long-term growth goal primarily through internal growth but acquisitions that fit our growth criteria and culture may also augment our growth.

Our expectation is that over time, we will continue to achieve our long-term target of 15% growth, but that we will have periods in which we exceed that goal and periods in which we fall short. In the second quarter of 2008, our gross profits grew 9.7% to $341.2 million. Our income from operations increased 11.3% to $144.5 million and our diluted earnings per share increased 10.6% to $0.52. The most challenging environment for us to reach our long-term growth goals is a sustained market of soft freight demand.

While cycles of fluctuating capacity supply and freight demand are a normal part of the freight transportation marketplace and over time we believe overall freight demand will increase relative to supply, a soft freight demand environment does make it more difficult for us to reach our growth goals in the short term.

Results of Operations

The following table sets forth our gross profit margins, or gross profit as a
percentage of gross revenues, between services and products:



                                   Three Months Ended         Six Months Ended
                                        June 30,                  June 30,
                                   2008           2007        2008         2007
          Transportation             15.4 %         17.9 %      16.7 %      19.0 %
          Sourcing                    8.0            7.9         8.1         7.8
          Information Services      100.0          100.0       100.0       100.0

          Total                      14.7 %         16.5 %      15.8 %      17.4 %

The following table summarizes our gross profits by service line:

                                            Three Months Ended June 30,           Six Months Ended June 30,
                                                                      %                                   %
                                            2008          2007      change        2008        2007      change
Gross profits (in thousands)
Transportation:
Truck                                    $   252,204    $ 232,892      8.3 %   $  511,527   $ 462,031     10.7 %
Intermodal                                    10,700       10,190      5.0         19,878      19,570      1.6
Ocean                                         14,034       10,799     30.0         26,289      20,045     31.1
Air                                            9,711        8,224     18.1         17,761      15,058     18.0
Miscellaneous                                 10,833        8,983     20.6         20,700      16,811     23.1

Total transportation                         297,482      271,088      9.7        596,155     533,515     11.7

Sourcing                                      30,285       28,319      6.9         57,338      52,212      9.8
Information Services                          13,419       11,491     16.8         25,722      22,101     16.4

Total                                    $   341,186    $ 310,898      9.7 %   $  679,215   $ 607,828     11.7 %

The following table represents certain statement of operations data, shown as percentages of our gross profits:

                                                        Three Months Ended         Six Months Ended
                                                             June 30,                  June 30,
                                                        2008           2007        2008         2007
Gross profits                                            100.0 %        100.0 %     100.0 %     100.0 %
Selling, general, and administrative expenses
Personnel expenses                                        42.9           45.4        44.2        46.6
Other selling, general, and administrative expenses       14.7           12.8        14.5        13.1

Total selling, general, and administrative expenses       57.6           58.2        58.7        59.7

Income from operations                                    42.4           41.8        41.3        40.3
Investment and other income                                0.5            1.1         0.6         1.2

Income before provision for income taxes                  42.9           42.9        41.9        41.5
Provision for income taxes                                16.4           16.4        15.9        16.0

Net income                                                26.5 %         26.5 %      26.0 %      25.5 %

Three Months Ended June 30, 2008 Compared to Three Months Ended June 30, 2007

REVENUES. Total Transportation gross profits increased 9.7 percent to $297.5 million in the second quarter of 2008 from $271.1 million in the second quarter of 2007. Our Transportation gross profit margin decreased to 15.4 percent in 2008 from 17.9 percent in 2007 due to gross profit margin declines in most of our transportation modes.

Our truck gross profits consist of truckload and less-than-truckload ("LTL") services. Our truck gross profit growth of 8.3 percent in the second quarter of 2008 was driven by volume growth, offset by declines in our truckload gross profit margins. We continued to gain market share as our truckload volumes increased approximately 11 percent. Including fuel, our truckload rates increased approximately 14 percent; excluding estimated impacts of fuel, underlying linehaul rates were consistent with the second quarter of 2007. Our profit per truckload transaction did not decline significantly and was within our historical range. We believe that a significant portion of our truckload gross profit margin percentage decline was due to the impact of higher fuel prices. In addition, we had gross profit margin compression due to an increase in our cost to hire truck capacity.

Our LTL shipments increased approximately 21 percent. Our LTL gross profit margins were consistent with the second quarter of 2007.

Our intermodal gross profit increase of 5.0 percent in the second quarter was driven by volume growth, offset in part by a decline in gross profit margins. Our gross profit margin decline was due to increased fuel prices.

The increase of 30.0 percent in our ocean transportation gross profits in the second quarter of 2008 was driven by volume growth and price increases.

In our air transportation business, approximately two-thirds of our gross profit growth of 18.1 percent in the second quarter of 2008 came from our domestic air business, which includes our previously-disclosed acquisition of LXSI Services Inc. on July 13, 2007.

Miscellaneous transportation gross profits consist primarily of transportation management fees and customs brokerage fees. The increase of 20.6 percent in the second quarter was driven primarily by volume growth in transportation management. We continue to grow our existing relationships and add new accounts in this business. For the second quarter, Sourcing gross profits increased 6.9 percent to $30.3 million in 2008 from $28.3 million in 2007, due to higher volumes. Despite challenges in the produce industry due in part to food safety concerns and higher fuel prices, our Sourcing business has been able to continue to grow by expanding retail and food service relationships and diversifying our services in areas such as private label programs, organics and consumer branded programs.

Our Information Services gross profits grew 16.8 percent in the second quarter of 2008. Our growth was driven by volume growth in our core fuel card and cash advance services and an increase in our revenue per transaction, due to the price of fuel.

With certain merchants our fee is based on a percentage of the sale amount. Approximately one-quarter of the growth was related to other services, such as fleet card and carrier compliance services.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. For the second quarter, operating expenses increased 8.6 percent to $196.7 million in 2008 from $181.1 million in 2007. This was due to an increase of 3.7 percent in personnel expenses and an increase of 25.8 percent in selling, general and administrative expenses.

As a percentage of gross profits, total operating expenses decreased to 57.6 percent in the second quarter of 2008 from 58.2 percent in the second quarter of 2007. This decrease was due to a decline in personnel expenses as a percentage of gross profits from 45.4 percent to 42.9 percent, offset partially by an increase in our selling, general and administrative expenses as a percentage of gross profits. Expenses related to our restricted stock program and various other incentive plans are variable, based on growth in our earnings. Our slower earnings growth in the second quarter of 2008 compared to the second quarter of 2007 resulted in a decrease in expense related to some of these incentives plans. This contributed to our personnel expenses growing slower than our gross profits.

Historically many of these awards have been done on a periodic or multi-year cycle, rather than annually, and they vest for a period of up to five years, depending on our growth in earnings. One impact of this practice is that there likely will be periods where more than one of these awards are being earned and expensed. We currently expect that we will have additional restricted stock grants awarded later this year, which will begin to be expensed in 2009. Our 2006 restricted equity grant will likely continue to vest and also be expensed in 2009.

The increase in our selling, general, and administrative expenses was driven by increased spending in several expense categories. We are investing in the business to support our future plans, by continuing to travel and seek sales opportunities in the marketplace, open new offices, add people, building systems, and expand existing offices. More significant increases included occupancy, travel, and insurance and claims. Air travel costs have increased and we have approximately 20% more office space than in the second quarter of 2007. We also had increased freight claims activity in the quarter. Our standard process is to tender these claims to the carrier and their insurance companies. In some instances the carrier or their insurance company refuses the claim. We had several larger freight claims we paid in the second quarter of 2008 and we will seek restitution from the carrier if possible. In addition, we increased our provision for doubtful accounts primarily due to the growth in our gross revenues and receivables.

INCOME FROM OPERATIONS. Income from operations increased 11.3% to $144.5 million for the three months ended June 30, 2008. This increase was primarily driven by the growth in our gross profits. Income from operations as a percentage of gross profits was 42.4% and 41.8% for the three months ended June 30, 2008 and 2007.

INVESTMENT AND OTHER INCOME. Investment and other income decreased 50.2% to $1.7 million for the three months ended June 30, 2008. During 2007 and through part of January 2008, we held auction rate security investments. We were able to exit those investments at par and do not have any concerns around liquidity or valuation of our investments. However, with lower short-term market rates on all investments and as a result of concentrating the majority of our cash in money markets during the second quarter, our yields were significantly less than a year ago.

PROVISION FOR INCOME TAXES. Our effective income tax rate was 38.2% for the second quarter of 2008 and 2007. The effective income tax rate for both periods is greater than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit.

NET INCOME. Net income increased 9.9% to $90.4 million for the three months ended June 30, 2008. Basic net income per share increased 10.4% to $0.53 for the three months ended June 30, 2008. Diluted net income per share increased 10.6% to $0.52 for the three months ended June 30, 2008.

Six Months Ended June 30, 2008 Compared to Six Months Ended June 30, 2007

REVENUES. Total Transportation gross profits increased 11.7 percent to $596.2 million for the six months ended June 30, 2008 from $533.5 million for the six months ended June 30, 2007. Our Transportation gross profit margin decreased to 16.7 percent in 2008 from 19.0 percent in 2007 due to gross profit margin declines in most of our transportation modes.

Our truck gross profits consist of truckload and less-than-truckload ("LTL") services. Our truck gross profit growth of 10.7 percent for the six months ended June 30, 2008 was driven by volume growth, offset by declines in our truckload gross profit margins. Our truckload volumes increased approximately 13 percent. Including fuel, our truckload rates increased approximately 11 percent; excluding estimated impacts of fuel, underlying linehaul rates were consistent with the six months ended June 30, 2007. Our truckload gross profit margins declined due to higher fuel prices and increased cost of capacity.

Our LTL shipments increased approximately 25 percent. Our LTL gross profit margins were consistent with the six months ended June 30, 2007.

Our intermodal gross profit increase of 1.6 percent for the six months ended June 30, 2008 was driven by volume growth, offset slightly by a decline in gross profit margins. Our gross profit margin decline was due to increased fuel prices.

The increase of 31.1 percent in our ocean transportation gross profits for the six months ended June 30, 2008 was driven by volume growth and price increases.

In our air transportation business, approximately two-thirds of our gross profit growth of 18.0 percent for the six months ended June 30, 2008 came from our domestic air business, which includes our previously-disclosed acquisition of LXSI Services Inc. on July 13, 2007.

Miscellaneous transportation gross profits consist primarily of transportation management fees and customs brokerage fees. The increase of 23.1 percent for the six months ended June 30, 2008 was driven primarily by volume growth in transportation management.

For the six months ended June 30, Sourcing gross profits increased 9.8 percent to $57.3 million in 2008 from $52.2 million in 2007, due to higher volumes and a slight increase in our gross profit margin.

Our Information Services gross profits grew 16.4 percent for the six months ended June 30, 2008. Our growth was driven by volume growth in our core fuel card and cash advance services and an increase in our revenue per transaction, due to the price of fuel. With certain merchants our fee is based on a percentage of the sale amount. Approximately one-quarter of the growth was related to other services, such as fleet card and carrier compliance services

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. For the six months ended June 30, operating expenses increased 9.9 percent to $398.6 million in 2008 from $362.8 million in 2007. This was due to an increase of 6.1 percent in personnel expenses and an increase of 23.2 percent in selling, general and administrative expenses.

As a percentage of gross profits, total operating expenses decreased to 58.7 percent for the six months ended June 30, 2008 from 59.7 percent for the six months ended June 30, 2007. This decrease was due to a decline in personnel expenses as a percentage of gross profits from 46.6 percent to 44.2 percent, offset partially by an increase in our selling, general and administrative expenses as a percentage of gross profits. Expenses related to our restricted stock program and various other incentive plans are variable, based on growth in our earnings. Our slower earnings growth for the six months ended June 30, 2008 compared to the six months ended June 30, 2007 resulted in a decrease in expense related to some of these incentives plans. This contributed to our personnel expenses growing slower than our gross profits.

The increase in our selling, general, and administrative expenses was driven by increased spending in several expense categories. We continue to invest in the business to support our future plans. More significant increases included occupancy, travel, and insurance and claims. In addition, due to the growth in our gross revenues and receivables, we increased our provision for doubtful accounts.

INCOME FROM OPERATIONS. Income from operations increased 14.5% to $280.6 million for the six months ended June 30, 2008. This increase was primarily driven by the growth in our gross profits. Income from operations as a percentage of gross profits was 41.3% and 40.3% for the six months ended June 30, 2008 and 2007.

INVESTMENT AND OTHER INCOME. Investment and other income decreased 40.5% to $4.2 million for the six months ended June 30, 2008. During 2007 and through part of January 2008, we held auction rate security investments. We were able to exit those investments at par and do not have any concerns around liquidity or valuation of our investments. However, with lower short-term market rates on all investments and as a result of concentrating the majority of our cash in money markets for most of the first two quarters, our yields were significantly less than a year ago.

PROVISION FOR INCOME TAXES. Our effective income tax rate was 37.9% for the six months ended June 30, 2008 and 38.4% for the six months ended June 30, 2007. The effective income tax rate for both periods is greater than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit.

NET INCOME. Net income increased 13.8% to $176.7 million for the six months ended June 30, 2008. Basic net income per share increased 14.3% to $1.04 for the six months ended June 30, 2008. Diluted net income per share increased 14.6% to $1.02 for the six months ended June 30, 2008.

Liquidity and Capital Resources

We have historically generated substantial cash from operations, which has enabled us to fund our growth while paying cash dividends and repurchasing stock. Cash and cash equivalents totaled $318.7 million and $288.7 million as of . . .