GENERAL

The following management's discussion and analysis describes the principal factors affecting our results of operations, liquidity, and capital resources. This discussion should be read in conjunction with the accompanying unaudited consolidated condensed financial statements and our Annual Report on Form 10-K for the year ended December 31, 2007, which include additional information about our business, our significant accounting policies and other relevant information that underlies our financial results. Without limiting the foregoing, the "Overview" and "Critical Accounting Policies and Estimates" sections under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our last Annual Report on Form 10-K should be read in conjunction with this Quarterly Report.

During 2006, the capacity of the trucking industry to haul freight expanded at the same time that customer demand for such services decreased. One result of the imbalance in supply and demand was industry-wide downward pressure on the rates companies were able to charge for their transportation services. Most participants in and observers of the trucking industry had revised their forecasts of the equalization of supply and demand from 2007 to year-end 2008. Instead, the recent, rapidly escalating costs of fuel have forced many truckers out of the market, and the equalization process has already begun. Despite a fraying economy, this has provided us the opportunity to pursue pricing improvements and some recouping of our costs to refrigerate the cargo of our customers.

Because we have a strong balance sheet with very little debt, we have been able to weather the buffeting caused by the excess capacity and increasing fuel costs. The attrition in capacity from the exit of weaker companies has left us well positioned in the marketplace.

Our internet address is www.ffex.net. All of our filings with the SEC are available free of charge through our website as soon as reasonably practicable after we file them.

RESULTS OF OPERATIONS
Three and Nine Months Ended September 30, 2008 and 2007

Revenue: Our revenue is derived from five types of transactions:
- Truckload
- Less-than-Truckload ("LTL")
- Dedicated Fleet
- Brokerage and Logistics
- Equipment Rental

Truckload and LTL linehaul revenue are order-based and earned by transporting cargo for our customers using tractors and trailers that we control by ownership, long-term leases or by agreements with independent contractors (sometimes referred to as "owner-operators"). Linehaul revenue also includes freight we transport on railroad flatcars, also called "intermodal" freight. We operate fleets that focus on refrigerated or "temperature-controlled" LTL, on truckload temperature-controlled shipments and on truckload non-refrigerated, or "dry", shipments. Over 90% of our LTL linehaul shipments must be temperature-controlled to prevent damage to the cargo, while about 10% are typically dry commodities.

Our dedicated fleet services consist of tractors and trailers that haul freight only for specific customers. Dedicated fleet revenue is asset-based. Customers typically are billed weekly for this type of service.

Our brokerage, or logistics, service helps us to balance the level of demand in our core trucking business. We assign shipments for which we have no readily-available transportation assets to other unaffiliated motor carriers through our brokerage service. We establish the price to be paid by the customer and we invoice the customer. We also assume the credit risk associated with the revenue. Our brokerage service also pays the other motor carrier and earns a margin on the difference.

Revenue from equipment rental primarily represents amounts we charge independent contractors for the use of trucks that we own and lease to them.

The rates we charge for our freight services include fuel surcharges. In periods when the price we incur for diesel fuel is high, we increase our surcharges in an effort to recover the increase from our customers. Using fuel surcharges to offset rising fuel costs is an industry-wide practice.

The following table summarizes and compares the significant components of revenue and other information regarding our business for each of the three- and nine-month periods ended September 30, 2008 and 2007:

                                           Three Months             Nine Months
                                           2008        2007        2008        2007
Revenue from: (a)
Temperature-controlled fleet            $  37.7     $  34.5     $ 108.9     $ 103.2
Dry-freight fleet                          16.9        18.0        53.1        55.8
Total truckload linehaul services          54.6        52.5       162.0       159.0
Dedicated fleets                            6.8         3.7        18.5        12.1
Total truckload revenue                    61.4        56.2       180.5       171.1
LTL linehaul services                      32.9        33.9        92.9        96.2
Total linehaul and dedicated revenue       94.3        90.1       273.4       267.3
Fuel surcharges                            33.8        18.7        90.1        51.5
Brokerage                                   3.1         4.4        10.6        11.5
Equipment rental                            1.3         1.5         4.1         4.0
Total revenue                             132.5       114.7       378.2       334.3
Operating expenses (a)                    128.9       116.0       376.3       339.4
Income (loss) from operations (a)       $   3.6     $  (1.3 )   $   1.9     $  (5.1 )
Operating ratio (b)                        97.3 %     101.1 %      99.5 %     101.5 %
Weekly average trucks in service          2,011       2,097       2,029       2,136
Revenue per truck per week (c)          $ 3,568     $ 3,269     $ 3,442     $ 3,209

Computational notes:
(a) Revenue and expense amounts are stated in millions of dollars. The amounts presented in the table may not agree to the amounts shown in the accompanying consolidated condensed statements of profit and loss due to rounding.
(b) Operating expenses divided by total revenue.
(c) Average weekly linehaul and dedicated revenue divided by weekly average trucks in service.

The following table summarizes and compares selected statistical data relating to our freight operations for each of the three- and nine-month periods ended September 30, 2008 and 2007:

                                               Three Months             Nine Months
Truckload                                     2008        2007        2008        2007
  Total linehaul miles (a)                    40.7        40.1       123.1       122.2
  Loaded miles (a)                            36.9        36.1       112.0       110.1
  Empty mile ratio (b)                         9.4 %       9.8 %       9.0 %       9.9 %
  Linehaul revenue per total mile (c)      $  1.34     $  1.31     $  1.32     $  1.30
  Linehaul revenue per loaded mile (d)     $  1.48     $  1.45     $  1.45     $  1.44
  Linehaul shipments (e)                      39.0        36.6       115.1       116.0
  Loaded miles per shipment (f)                946         987         973         949
LTL
  Hundredweight (e)                          2,190       2,225       6,397       6,438
  Shipments (e)                               71.9        72.9       205.4       208.1
  Linehaul revenue per hundredweight (g)   $ 15.04     $ 15.24     $ 14.53     $ 14.95
  Linehaul revenue per shipment (h)        $   458     $   466     $   453     $   462
  Average weight per shipment (i)            3,046       3,054       3,115       3,093

Computational notes:
(a) In millions.
(b) Total linehaul miles minus loaded miles, divided by total linehaul miles.
(c) Revenue from linehaul services divided by total linehaul miles.
(d) Revenue from linehaul services divided by loaded miles.
(e) In thousands.
(f) Total loaded miles divided by number of linehaul shipments.
(g) LTL revenue divided by LTL hundredweight.
(h) LTL revenue divided by number of LTL shipments.
(i) LTL hundredweight times one hundred, divided by number of LTL shipments.

For the three- and nine-month periods ended September 30, 2008, total revenue was $132.5 million and $378.2 million, respectively, as compared to $114.7 million and $334.3 million during the comparable periods of 2007. Of the $17.7 million (15.4%) increase for the quarter and the $43.9 million (13.1%) increase for the nine months, increased fuel surcharges accounted for $15.1 million (80.7%) and $38.6 million (75%), respectively.

Much of our focus for profit improvement revolves around yield (pricing) improvement through a variety of initiatives. Our general rate increase ("GRI") was implemented on a broad base during the first week of June, and was phased in during the third quarter of 2008. We expect to see the full impact of the GRI in the fourth quarter of 2008 and beyond. In addition to the GRI, we have an ongoing initiative to reduce the amount of spot pricing (our so-called instant rates) and are converting to a more stable tariff-based pricing. With new discipline in pricing we have seen a reduction in spot pricing from approximately 30% of our LTL shipments to less than 10%. As a result, LTL yield has improved significantly and we believe there is additional improvement to be realized. We have installed freight costing software that helps us analyze our freight by lane, customer, terminal, commodity, size, tariff, and so forth. With this costing model, we are now gaining visibility to the validity of our existing pricing and have much more insight into the profitability of new freight before we haul it. The combination of these initiatives is intended to provide sustainable yield improvement.

While fuel surcharges can provide relief for loaded miles traveled, the recent spike in fuel costs have highlighted the additional fuel costs incurred by refrigerated carriers - the cost of refrigerating the customer's cargo. In June, we also implemented a Temperature Control Charge ("TCC"). This charge applies to our refrigerated truckload business and is aimed at offsetting rising fuel costs to keep commodities temperature-controlled in trailers and in warehouses. Thus far, our customers have recognized our need for this cost recovery. We have implemented this charge on roughly 70% of our truckload revenue.

While the cost of fuel has risen so dramatically that it improved our ability to sell the need for a TCC, intense scrutiny has been placed on every other type of cost as customers struggle with their budgets for transportation expenses. In the process, we are keeping a careful eye on the fuel surcharge levels for each of our major customers to ensure that we are adequately insulated from volatile fuel prices.

Service and capacity are the basic determinants of what our customers seek. Our extensive service improvement programs have put us in a position to better enable our customers to rely on our service performance. Our customers are negotiating with us to gain commitment of our capacity to ensure that they are not left short during the peak season. In return for that committed capacity, we look for compensatory pricing and are working with our customers to achieve mutually beneficial terms, with indications of rate stability and improved pricing.

When comparing the three- and nine-month periods ended September 30, 2008 to the same periods of 2007, truckload revenue increased by $5.2 million (9.3%) and by $9.4 million (5.5%), respectively. Truckload linehaul revenue per loaded mile improved slightly from $1.45 to $1.48 when comparing the quarters and from $1.44 to $1.45 when comparing the nine months. For the quarter, the average truckload length of haul decreased to 946 miles (4.2%) and our empty mile ratio improved from 9.8% to 9.4%. Year-to-date, the truckload length of haul increased to 973 miles (2.6%) and the empty mile ratio improved from 9.9% to 9.0%. The number of truckload linehaul shipments we transported during the first three quarters of 2008 decreased 0.8% to 115.1 thousand, compared to 116 thousand during the year-ago nine months. For the quarter, the number of truckload linehaul shipments increased 6.6% to 39 thousand, compared to 36.6 thousand for the same year-ago quarter.

Truckload linehaul revenue includes our intermodal operations. We have more than tripled the number of intermodal loads, from about 4,200 to more than 13,300, comparing the first three quarters of 2008 to the same period of 2007, and more than doubled the number of loads when comparing the 3rd quarters. Intermodal service entails transporting loaded trailers over long distances on railroad flat cars, generally at a lower cost than using a tractor to transport the trailer. Using a tractor, however, usually takes fewer days to transport a load. With intermodal service, we offer our customers a lower-cost alternative while moving the freight for a large portion of the journey without the need to provide a driver, a tractor or fuel for the tractor. Operations do require the deployment of such resources to transport the trailer between the rail yard and the load's origin and destination. We continue to be successful in negotiating directly with the railroads, avoiding the cost of third-party brokers. This has improved our cost structure by 7.2% per load when comparing the first three quarters of 2008 to the same period of 2007. We are currently moving approximately 450 loads per week via rail. We feel our partnership with the railroads provide the perfect balance between price and service, without the customer being forced to choose one over the other.

Since refrigerated truckload capacity has contracted and the demand versus capacity equation is more balanced, our reliance on brokers has diminished and our ability to grow the overall percentage of trucks operating within our preferred network is providing better revenue opportunities for our truckload fleets. We are only committing remaining fourth quarter capacity to our truckload customers with a very careful pricing review to ensure our rates are commensurate with market demand. The demand vs. capacity curve is not nearly so robust on the dry van side of the truckload market, and we continue to have to work harder to solidify rates and price increases in this area of our service offerings.

LTL linehaul revenue decreased by $1.0 million (2.9%) and $3.3 million (3.4%) during the three- and nine-month periods ended September 30, 2008, respectively, as compared to the same periods of 2007. For the quarter, the number of LTL shipments we transported decreased by 1.3%, the average weight of such shipments decreased by 0.3% and the average linehaul revenue per LTL shipment declined by 1.6%. For the year, the number of LTL shipments we transported decreased by 1.3%, the average weight of such shipments increased by 0.7% and the average linehaul revenue per LTL shipment declined by 2.1%. Softness in the LTL market contributed to a drop in our revenue per hundredweight from $14.95 in the first three quarters of 2007 to $14.53 (2.8%) for the same period of 2008 and from $15.24 in the third quarter of 2007 to $15.04 (1.4%) in the same period of 2008.

We have implemented a variety of revenue-enhancing and cost-reducing initiatives since the comparable quarter of last year, and we are seeing some positive results. But, we are also closely measuring our progress on a sequential, quarter-to-quarter basis. That enables us to monitor not just where we stand compared to last year, but also allows us to see how we got to be where we are now. LTL revenue per hundredweight deteriorated from $14.42 in the first quarter of 2008 to $14.10 in the second quarter. The third quarter of the year is often the strongest for our LTL service. With the impact of our pricing initiatives and the seasonal spike, we have improved that in the third quarter to $15.04, a 6.7 % improvement over last quarter. During the third quarter of 2007, LTL revenue per hundred weight was $15.24, so we are improving sequentially, but we have not yet returned to our year-ago LTL yield. Concurrent with anticipated growth in customer demand as we move through the year, we plan to increase our LTL rates. In last year's fourth quarter, LTL revenue per hundredweight was $14.55.

LTL demand is not quite as strong as truckload but is showing signs of stabilizing as well. We are in the initial stages of implementation of new technology (Cheetah) that will allow us to analyze and optimize our LTL network planning. With the improved revenue yields and the improved operational efficiencies, we expect continuing improvement in the profitability of our LTL service offering.

Dedicated fleet revenue, also included in our truckload linehaul revenue, improved by $3.1 million (84%) and $6.4 million (53%) for the three- and nine-month periods ended September 30, 2008, respectively, as compared to the same periods of 2007. In an effort to expand our dedicated fleet revenue, we have directed our resources to specific goals that may generate more acceptable levels of profitability. While excess capacity in the trucking industry has restricted rates and yield in the marketplace, new dedicated fleet customers were added in 2007 and early 2008, and existing customers expanded traffic lanes for which they required dedicated services. We plan for continued growth in this service offering.

Revenue from our logistics service decreased by $1.3 million (29.5%) and by $900 thousand (7.8%) between the three- and nine-month periods ended September 30, 2008 and 2007, respectively. Logistics service enables us to accept additional loads for which we have no asset-based capacity by engaging unaffiliated trucking companies to haul the freight. We bill the customer and pay the trucking company. During the latter half of 2006, we began to refocus on our logistics service as a potential source of growth, but logistics efforts continue to be difficult. In softened demand markets, shippers have multiple options in gaining capacity and don't rely as heavily on logistics companies and brokers to find capacity for them. However, as demand strengthens in refrigerated markets, we believe that opportunities for logistics will improve. Nonetheless, narrow margins are inherent to this type of business, and start-up costs are associated with its expansion. We have decided to continue our previously described delay in additional expansion and continue to focus on building density in the existing service centers. We have new management responsible for the profitability of our logistics service offering. Their focus is on the improvement of gross margins (revenue less the cost of the third-party carrier) and the reduction of operating expenses. They have reduced the headcount and the cost of remote locations. We remain optimistic about this service and will assess the overall situation by year-end. We may resume expansion strategies at that time, particularly if there are signs of a rebounding economy.

Revenue from fuel surcharges is reported as revenue under US GAAP but is essentially a means to recover some of the costs of fuel which are above certain base levels established years ago. Fuel surcharge revenue is volatile because fuel costs are volatile. Our revenue from fuel surcharges increased by $15.1 million (81%) and $38.6 million (75%) for the three- and nine-month periods ended September 30, 2008, respectively, as compared to the same periods of 2007. This is not considered to be a service offering but is an area where we strive to maximize our ability to recover our costs of fuel.

Operating Expenses: The following table summarizes and compares, as a percentage of revenue, certain major operating expenses for each of the three- and nine-month periods ended September 30, 2008 and 2007:

                                             Three Months           Nine Months
Operating Expenses Incurred for             2008        2007       2008        2007
Salaries, wages and related expenses        25.4 %      27.8 %     25.5 %      29.0 %
Purchased transportation                    22.3        26.9       24.6        24.9
Fuel                                        24.3        18.9       23.5        18.4
Supplies and expenses                       10.6        12.1       10.5        12.2
Revenue equipment rent and depreciation     10.3        10.7       10.6        11.2
Claims and insurance                         2.1         2.7        2.4         3.7
Other                                        2.3         2.0        2.4         2.1
Total operating expenses                    97.3 %     101.1 %     99.5 %     101.5 %

Salaries, Wages and Related Expenses: Salaries, wages and related expenses increased by $1.8 million (5.6%) and decreased by $577 thousand (0.6%) during the three- and nine-month periods ended September 30, 2008, respectively, as compared to the same periods of 2007. The following table summarizes and compares the major components of these expenses for each of the three- and nine-month periods (in millions):

                                                Three Months                 Nine Months
Amount of Salaries, Wages and Related
Expenses Incurred for                           2008          2007          2008          2007
Employee-driver wages and per-diem
expenses                                   $    19.5     $    17.7     $    55.4     $    54.4
Non-driver salaries
   Motor-carrier operations                      9.6           8.3          27.3          27.2
   Logistics and brokerage                       0.5           0.4           1.7           0.8
   Severance pay                                  --           0.1           0.2           1.0
Payroll taxes                                    2.1           1.9           6.3           6.3
Work-related injuries                            0.9           1.3           2.6           3.1
Health insurance and other                       1.1           2.2           3.0           4.3
                                           $    33.7     $    31.9     $    96.5     $    97.1

Employee-driver wages and per diem expenses rose by $1.8 million (10.2%) and by $1.0 million (1.8%) when comparing the three- and nine-month periods ended September 30, 2008, respectively, to the same periods of 2007. Employee-drivers are typically paid on a per-mile basis, except in our dedicated fleets where wages are typically paid by the day.

Employee-driver turnover has deteriorated when comparing turnover rates of 98% to 93% for the rolling twelve-month periods ended September 30, 2008 and 2007, respectively. In the trucking industry, driver turnover has often exceeded 125% over the years, as the industry has competed with construction and other trades for labor. Since 2006, we have taken certain steps to address this problem, such as the centralization of our truckload operations and improvements in communications between drivers and their fleet managers, with generally favorable results.

During 2007, our employee-driver turnover rate was approximately 90%, resulting from a number of factors. If we can retain a driver through the fairly difficult first six- to twelve-month period, we usually have the opportunity to retain that driver for the long-term. For example, the average tenure for all of our drivers at the end of 2007 was 3.4 years, but for trainees, the average tenure was 2.5 months. Among drivers who have been with us for at least one year, the average tenure was 5.6 years.

When comparing the three- and nine-month periods ended September 30, 2008 and 2007, non-driver salaries increased by $1.3 million (14.8%) and by $200 thousand (0.7%), respectively. The total non-driver salaries and related expenses in our motor-carrier operations include non-cash deferred compensation expenses associated with restricted stock awards and other stock-based compensation. The expenses of such deferred compensation are reduced when our stock price drops, and were a credit to expense of $63 thousand and $524 thousand during the third quarters of 2008 and 2007, respectively, thus representing an increase in expense of $461 thousand when comparing the two quarters. Such deferred compensation expense was $141 thousand and $36 thousand for the nine months ended September 30, 2008 and 2007, respectively. Excluding the cost of deferred compensation, non-driver salaries in our motor-carrier operations increased by $900 thousand for the quarter and by $100 thousand year-to-date, when comparing the comparable periods of 2008 and 2007. Non-driver salaries for the third quarter of 2008 include an accrual for management bonuses that were absent from last year's results. Our bonuses are based on our annual profitability and we did not earn bonuses last year due to our poor results during 2007.

Costs associated with work-related injuries decreased by $400 thousand (30.8%) and by $500 thousand (16.1%) when comparing the three- and nine-month periods ended September 30, 2008, respectively, to the same periods of 2007. Such expenses principally relate to injuries sustained by employees during the course of their employment. Large fluctuations can be caused by the occurrence of just one serious injury in a quarter compared to a quarter with lesser experience in the frequency or the severity of such injuries or the settlement of claims for an amount other than previously estimated.

We are self-insured for health care with insurance stop-loss coverage for catastrophic situations, and we share the cost of health care coverage with our employees. For the past several years, the medical and health insurance markets have experienced double-digit percentage increases. In response to the market, we have repeatedly increased both the amounts employees pay to participate and the share of medical costs that participating employees must pay. Aggressive program management and increased employee cost-sharing have helped to lower our costs by $1.1 million (50%) and by $1.3 million (30%) for the three- and nine-month periods ended September 30, 2008, respectively, as compared to the same periods a year ago.

We also address rising medical costs through programs targeting particular issues. For example, during 2007, we implemented an employee wellness program that we expect will have a positive impact on our health insurance costs in the future. We have offered weekly nutrition classes, and many employees have participated in weight loss contests. During 2008, we added incentives to employees to improve their overall health, with potential emphasis on one, or a combination, of nutrition, weight loss, tobacco avoidance and an active lifestyle. We anticipate the rewards to employees participating in such wellness incentive programs will include improved health for the employees and lower claims experience and costs for both the company and the participants.

Purchased Transportation: Purchased transportation expense for linehaul service primarily represents payments to owner-operators for our use of their vehicles to transport linehaul shipments and payments to railroads for the transportation of our intermodal loads. This expense decreased by $1.3 million (4.2%) and increased by $9.9 million (11.9%) during the three- and nine-month periods ended September 30, 2008, respectively, as compared to the same periods of 2007. The following table summarizes and compares the major components of our purchased transportation expense for each of those periods by type of service (in millions):

. . .