The following discussion and analysis of our financial condition and results of operations should be read together with the selected consolidated financial data and our consolidated financial statements and the related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those under the heading "Risk Factors" beginning on page 6. We do not assume, and specifically disclaim, any obligation to update any forward-looking statement contained in this report.

Overview

The primary source of our operating revenue is truckload revenue, which we generate by transporting long-haul and regional freight for our customers and report within our Truckload segment. Generally, we are paid by the mile for our services. We also derive truckload revenue from fuel surcharges, loading and unloading activities, equipment detention and other ancillary services. The main factors that affect our truckload revenue are the rate per mile we receive from our customers, the percentage of miles for which we are compensated and the number of miles we generate with our equipment. We monitor our revenue production primarily through average truckload revenue, net of fuel surcharges, per tractor per week. We also analyze our average truckload revenue, net of fuel surcharges, per total mile, non-revenue miles percentage, the miles per tractor we generate, our accessorial revenue and our other sources of operating revenue.

Our operating revenue also includes revenue reported within our Logistics segment, which consists of revenue from our internal brokerage and intermodal operations, both launched in 2005, and through our 45% interest in MWL, a third-party provider of logistics services to the transportation industry. Brokerage services involve arranging for another company to transport freight for our customers while we retain the billing, collection and customer management responsibilities. Intermodal services involve the transport of our trailers on railroad flatcars for a portion of a trip, with the balance of the trip using our tractors or, to a lesser extent, contracted carriers. The main factors that affect our logistics revenue are the rate per mile and other charges we receive from our customers and the rates charged by third-party providers.

In addition to the factors discussed above, our operating revenue is also affected by, among other things, the United States economy, inventory levels, the level of truck and rail capacity in the transportation market and specific customer demand.

In 2008, we increased our operating revenue by $47.1 million, or 8.4%. Our operating revenue, net of fuel surcharges, increased $1.5 million, or 0.3%, compared with 2007. Fuel surcharges increased $45.5 million, or 52.3%, in 2008 due to the significant increase in the average cost of fuel from 2007. Truckload segment revenue, net of fuel surcharges, decreased 5.5% due to a 6.5% decrease in our weighted average number of tractors, partially offset by a 2.2% increase in average truckload revenue, net of fuel surcharges, per total mile. The increase in average truckload revenue, net of fuel surcharges, per total mile was the result of an improved freight mix and a reduced average length of haul. Our average truckload revenue, net of fuel surcharges, per tractor per week increased 0.7% in 2008 primarily due to the increase in revenue per total mile, partially offset by a 1.1% decrease in average miles per tractor. The changes in our operating statistics are consistent with the growth of our regional temperature-controlled operations in 2008. By focusing on shorter lengths of haul in certain defined areas, we are addressing customer trends toward regional distribution to lower their transportation expense, furthering our own objectives of reducing fuel consumption per load, and matching some of our drivers' desires to stay closer to home. The concentration of a portion of our fleet in these markets is evident in a 6.4% reduction from 2007 in average length of haul to 853 miles. In response to a challenging freight environment with industry-wide capacity exceeding freight demand, we decreased our fleet throughout 2007. As a result, our average fleet size was 164 tractors less in 2008 than in 2007. The 0.3% increase in our operating revenue, net of fuel surcharges, was driven by continued volume growth in each of

our internal brokerage and intermodal services and in the logistics services provided by MWL, partially offset by the decrease in truckload revenue, net of fuel surcharges. Logistics revenue, which represented 16.3% of our operating revenue in 2008, increased $29.4 million, or 42.4%, compared with 2007.

Our profitability on the expense side is impacted by variable costs of transporting freight for our customers, fixed costs and expenses containing both fixed and variable components. The variable costs include fuel expense, driver-related expenses, such as wages, benefits, training, and recruitment, and independent contractor costs, which are recorded under purchased transportation. Expenses that have both fixed and variable components include maintenance and tire expense and our total cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on safety, fleet age, efficiency and other factors. Our main fixed costs relate to the acquisition and financing of long-term assets, such as revenue equipment and operating terminals. We expect our annual cost of tractor and trailer ownership will increase in future periods as a result of higher prices of new equipment. Although certain factors affecting our expenses are beyond our control, we monitor them closely and attempt to anticipate changes in these factors in managing our business. For example, fuel prices fluctuated dramatically at various times during the last several years, with the D.O.E. national average cost of fuel increasing to $3.80 per gallon in 2008 from $2.89 per gallon in 2007. We manage our exposure to changes in fuel prices primarily through fuel surcharge programs with our customers, as well as through volume fuel purchasing arrangements with national fuel centers and bulk purchases of fuel at our terminals. To help further reduce fuel expense, we began installing auxiliary power units in our tractors in 2007 to provide climate control and electrical power for our drivers without idling the tractor engine. For our Logistics segment, our profitability on the expense side is impacted by the percentage of logistics revenue we pay to providers for the transportation services we arrange.

Our operating expenses as a percentage of operating revenue, or "operating ratio," was 94.6% in 2008 compared with 95.0% in 2007. Our earnings per diluted share increased to $0.82 in 2008 from $0.68 in 2007.

Our business requires substantial, ongoing capital investments, particularly for new tractors and trailers. At December 31, 2008, we had approximately $2.9 million of long-term debt, including current maturities, and $255.7 million in stockholders' equity. In 2008, we spent $32.6 million to purchase new revenue equipment, net of proceeds from dispositions. These expenditures were funded with cash flows from operations. We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $40 million to $60 million in 2009, which we will adjust throughout the year as we size our fleet to existing customer demand. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months. Based upon anticipated cash flows, current borrowing availability and sources of financing we expect to be available to us, we do not anticipate any significant liquidity constraints in the foreseeable future.

This Management's Discussion and Analysis of Financial Condition and Results of Operations includes discussions of truckload and logistics revenue, net of fuel surcharges, and net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads). We provide these additional disclosures because management believes these measures provide a more consistent basis for comparing results of operations from period to period. These financial measures in this report have not been determined in accordance with U.S. generally accepted accounting principles (GAAP). Pursuant to Item 10(e) of Regulation S-K, we have included the amounts necessary to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures, operating revenue and fuel and fuel taxes.

Share-based Payment Arrangement Compensation

Effective January 1, 2006, we adopted the fair value recognition provisions of Statement of Financial Accounting Standards No. 123R, "Share-Based Payment" ("SFAS 123R") using the modified prospective transition method, and therefore have not restated prior periods' results. All share-based compensation expense is recorded in salaries, wages and benefits expense. Total share-based compensation expense recorded in 2008 was $666,000 ($432,000 net of income tax benefit), in 2007 was $460,000 ($321,000 net of income tax benefit) and in 2006 was $447,000 ($318,000 net of income tax benefit), which entirely represents additional share-based compensation expense recorded as a result of adopting SFAS 123R. Unrecognized compensation expense from unvested service-based stock option awards was $1.5 million as of December 31, 2008 and is expected to be recorded over a weighted-average period of 3.6 years. Unrecognized compensation expense from unvested performance-based stock option awards was $911,000 as of December 31, 2008 and will be recorded in the periods in which the performance condition is probable of achievement through 2010.

Results of Operations

The following table sets forth for the years indicated certain operating statistics regarding our revenue and operations:

                                                   2008          2007          2006
Truckload Segment:
Average truckload revenue, net of fuel
surcharges, per total mile                      $    1.512    $    1.480    $    1.477
Average miles per tractor(1)                       108,026       109,269       108,781
Average truckload revenue, net of fuel
surcharges, per tractor
per week(1)                                     $    3,124    $    3,101    $    3,081
Average tractors(1)                                  2,352         2,516         2,504
Average miles per trip                                 853           911           937
Total miles - company-employed drivers (in
thousands)                                         222,043       228,776       222,579
Total miles - independent contractors (in
thousands)                                          32,081        46,096        49,810

Logistics Segment:
Brokerage:
Revenue (in thousands)                          $   62,315    $   48,640    $   28,636
Loads                                               30,410        25,246        16,083
Intermodal:
Revenue (in thousands)                          $   36,598    $   20,837    $   12,604
Loads                                               11,513         6,793         4,073
Average tractors                                        53            31            19

Comparison of Year Ended December 31, 2008 to Year Ended December 31, 2007



The following table sets forth for the years indicated our operating revenue,
operating income and operating ratio by segment, along with the change for each
component:



                                                                       Dollar          Percentage
                                                                       Change            Change
(Dollars in thousands)                     2008         2007        2008 vs. 2007     2008 vs. 2007
Operating revenue:
Truckload revenue, net of fuel
surcharge revenue                        $ 384,264    $ 406,754    $       (22,490 )           (5.5 )%
Truckload fuel surcharge revenue           123,922       83,786             40,136             47.9
Total Truckload revenue                    508,186      490,540             17,646              3.6

Logistics revenue, net of intermodal
fuel surcharge revenue(1)                   90,194       66,163             24,031             36.3
Intermodal fuel surcharge revenue            8,719        3,314              5,405            163.1
Total Logistics revenue                     98,913       69,477             29,436             42.4

Total operating revenue                  $ 607,099    $ 560,017    $        47,082              8.4 %

Operating income:
Truckload                                $  26,055    $  22,689    $         3,366             14.8 %
Logistics                                    6,650        5,112              1,538             30.1
Total operating income                   $  32,705    $  27,801    $         4,904             17.6 %

Operating ratio(2):
Truckload                                     94.9 %       95.4 %                               0.5 %
Logistics                                     93.3         92.6                                (0.8 )
Consolidated operating ratio                  94.6 %       95.0 %                               0.4 %

(2) Operating expenses as a percentage of operating revenue.

Our operating revenue increased $47.1 million, or 8.4%, to $607.1 million in 2008 from $560.0 million in 2007. Our operating revenue, net of fuel surcharges, increased $1.5 million, or 0.3%, to $474.5 million in 2008 from $472.9 million in 2007. The increase in operating revenue, net of fuel surcharges, was driven by continued volume growth in each of our internal brokerage and intermodal services and in the logistics services provided by MWL, partially offset by a decrease in truckload revenue, net of fuel surcharges. Fuel surcharges increased $45.5 million, or 52.3%, in 2008 due to the significant increase in the average cost of fuel from 2007.

Truckload segment revenue increased $17.6 million, or 3.6%, to $508.2 million in 2008 from $490.5 million in 2007. Truckload segment revenue, net of fuel surcharges, decreased 5.5% due to a 6.5% decrease in our weighted average number of tractors, partially offset by a 2.2% increase in average truckload revenue, net of fuel surcharges, per total mile. The increase in average truckload revenue, net of fuel surcharges, per total mile was the result of an improved freight mix and a reduced average length of haul. Our average truckload revenue, net of fuel surcharges, per tractor per week increased 0.7% in 2008 from 2007 due to the increase in revenue per total mile, partially offset by a 1.1% decrease in average miles per tractor. The changes in our

operating statistics are consistent with the growth of our regional temperature-controlled operations in 2008. By focusing on shorter lengths of haul in certain defined areas, we are addressing customer trends toward regional distribution to lower their transportation expense, furthering our own objectives of reducing fuel consumption per load, and matching some of our drivers' desires to stay closer to home. The concentration of a portion of our fleet in these markets is evident in a 6.4% reduction from 2007 in average length of haul to 853 miles. In response to a challenging freight environment with industry-wide capacity exceeding freight demand, we decreased our fleet throughout 2007. As a result, our average fleet size was 164 tractors less in 2008 than in 2007. The improvement in tractor productivity and in our overall cost structure resulted in increased profitability from 2007.

Logistics segment revenue increased $29.4 million, or 42.4%, to $98.9 million in 2008 from $69.5 million in 2007. Logistics segment revenue, net of intermodal fuel surcharges, increased 36.3%. The increase in logistics revenue primarily resulted from continued volume growth in each of our internal brokerage and intermodal services and in the logistics services provided by MWL. The increase in the operating ratio for our Logistics segment in 2008 was primarily due to an increase as a percentage of logistics revenue of the payments to carriers for transportation services which we arranged.

The following table sets forth for the years indicated the dollar and percentage increase or decrease of the items in our consolidated statements of operations, and those items as a percentage of operating revenue:

                                                Dollar          Percentage          Percentage of
                                                Change            Change          Operating Revenue
(Dollars in thousands)                       2008 vs. 2007     2008 vs. 2007      2008         2007

Operating revenue:                          $        47,082              8.4 %     100.0 %      100.0 %
Operating expenses (income):
Salaries, wages and benefits                         (1,158 )           (0.8 )      25.1         27.5
Purchased transportation                              9,399              9.1        18.6         18.5
Fuel and fuel taxes                                  26,871             18.0        29.0         26.6
Supplies and maintenance                               (243 )           (0.6 )       6.3          6.9
Depreciation                                          2,696              5.7         8.2          8.4
Operating taxes and licenses                            (94 )           (1.4 )       1.1          1.2
Insurance and claims                                  3,056             13.7         4.2          4.0
Communications and utilities                           (129 )           (3.3 )       0.6          0.7
Gain on disposition of revenue equipment                722             21.3        (0.4 )       (0.6 )
Other                                                 1,058             10.2         1.9          1.8
Total operating expenses                             42,178              7.9        94.6         95.0

Operating income                                      4,904             17.6         5.4          5.0
Other expenses (income):
Interest expense                                     (2,681 )          (70.1 )       0.2          0.7
Interest income and other                               509             73.4           -         (0.1 )
Minority interest                                       318             39.7         0.2          0.1
                                                     (1,854 )          (47.2 )       0.3          0.7
Income before income taxes                            6,758             28.3         5.0          4.3
Provision for income taxes                            3,655             41.1         2.1          1.6
Net income                                  $         3,103             20.7 %       3.0 %        2.7 %

Salaries, wages and benefits consist of compensation for our employees, including both driver and non-driver employees, employees' health insurance, 401(k) plan contributions and other fringe benefits. These expenses vary depending upon the ratio of company drivers to independent contractors, our efficiency, our experience with employees' health insurance claims, changes in health care premiums and other factors. The decrease in salaries, wages and benefits resulted primarily from a 2.9% decrease in the total miles driven by company drivers and the adoption in the first quarter of 2008 of a per diem expense reimbursement program for our drivers, which was partially offset by a $2.3 million increase in our self-insured medical claims, which increased our employees' health insurance expense, and a $1.3 million increase in bonus compensation expensed for our non-driver employees.

Purchased transportation consists of payments to independent contractor providers of revenue equipment and to carriers for transportation services we arrange in connection with brokerage and intermodal activities. This category will vary depending upon the ratio of company drivers versus independent contractors, the amount of fuel surcharges passed through to independent contractors and the amount and rates we pay to third-party railroad and motor carriers. Purchased transportation expense increased $9.4 million in total, or 9.1%, in 2008 from 2007. Payments to carriers for transportation services we arranged in our brokerage and intermodal operations increased $21.3 million to $73.8 million in 2008 from $52.5 million in 2007, as our Logistics operations significantly increased in size and scope. The portion of purchased transportation expense related to our independent contractors, including fuel surcharges, decreased $11.9 million in 2008, primarily due to a decrease in the number of independent contractor-owned tractors in our fleet. We expect that purchased transportation expense will continue to increase as we grow our Logistics segment, but this increase will be partially offset by an expected continuing decline in the number of independent contractor-owned tractors in our fleet due to difficult operating conditions.

Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) decreased $14.6 million, or 19.2%, to $61.4 million in 2008 from $76.1 million in 2007. Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads were $18.2 million in 2008 and $14.2 million in 2007. Over the past year, we have worked diligently to control fuel costs and usage by improving our volume purchasing arrangements and optimizing our drivers' fuel purchases with national fuel centers, focusing on shorter lengths of haul, installing and tightly managing the use of auxiliary power units in our tractors to minimize engine idling and improving fuel usage in our trailers' refrigeration units. The decrease in net fuel expense was primarily due to a 2.9% decrease in the total miles driven by our company-owned fleet and to the cost control measures stated above, principally the use of auxiliary power units. Auxiliary power units, which were installed in 96% of our company-owned tractors as of December 31, 2008, provide climate control and electrical power for our drivers without idling the tractor engine. The impact of decreased miles and the cost control measures were partially offset by a significant increase in the D.O.E. national average cost of fuel during 2008 to $3.80 per gallon from $2.89 per gallon in 2007. Net fuel expense represented 14.9% of truckload and intermodal revenue, net of fuel surcharges, in 2008, compared with 17.9% in 2007.

Depreciation relates to owned tractors, trailers, auxiliary power units, communications units, terminal facilities and other assets. The increase in depreciation was due to our investment in auxiliary power units since mid-2007 and to an increase in the relative percentage of company-owned tractors to independent contractor-owned tractors in 2008. We expect our annual cost of tractor and trailer ownership will increase in future periods as a result of higher prices of new equipment, which is expected to result in greater depreciation over the useful life.

Insurance and claims consist of the costs of insurance premiums and the accruals we make for claims within our self-insured retention amounts, primarily for personal injury, property damage, physical damage to our equipment, cargo claims and workers' compensation claims. These expenses will vary primarily based upon the frequency and severity of our accident experience, our self-insured retention levels and the market for insurance. The increase in insurance and claims in 2008 was primarily the result of an increase in the cost of self-insured auto liability and workers' compensation accident claims. We are responsible for the first $1.0

million on each auto liability claim and also responsible for up to $1.0 million in the aggregate for 33% of all auto liability claim amounts in excess of $1.0 million. We are responsible for the first $750,000 on each workers' compensation claim. Our significant self-insured retention exposes us to the possibility of significant fluctuations in claims expense between periods depending on the frequency, severity and timing of claims and to adverse financial results if we incur large or numerous losses. In the event of an uninsured claim above our insurance coverage, or an increase in the frequency or severity of claims within our self-insured retention, our financial condition and results of operations could be materially and adversely affected.

A decrease in the market value for used revenue equipment, which we believe was driven by capacity reductions in the industry, caused our gain on disposition of revenue equipment to decrease to $2.7 million in 2008 from $3.4 million in 2007, despite an increase in the number of tractors sold. Future gains or losses on disposition of revenue equipment will be impacted by the market for used revenue equipment, which is beyond our control. We do not expect our gain on disposition to improve in the near future as we believe that there are few buyers with adequate financing in comparison with available inventory, and the expectation of additional trucking company failures is likely to keep used truck inventories high.

As a result of the foregoing factors, our operating expenses as a percentage of operating revenue, or "operating ratio," was 94.6% in 2008 compared with 95.0% in 2007.

Interest expense primarily consists of interest on our unsecured committed credit facility and senior unsecured notes. The decrease in interest expense of $2.7 million, or 70.1%, in 2008 from 2007 was primarily the result of lower average debt balances outstanding.

Our effective income tax rate increased to 41.0% in 2008 from 37.3% in 2007, primarily because of the nondeductible effect of a per diem pay structure for our drivers adopted in the first quarter of 2008.

As a result of the factors described above, net income increased to $18.1 million in 2008 from $15.0 million in 2007. Net earnings increased to $0.82 per diluted share in 2008 from $0.68 per diluted share in 2007.

. . .