RESULTS OF OPERATIONS:

EXECUTIVE SUMMARY

The Company earns revenue by the movement of freight by water to and from Puerto Rico, the Dominican Republic and the continental United States through its terminal facility in Jacksonville, Florida. The Company also earns revenue from the movement of freight within the continental United States when such movement complements its core business of moving freight to and from Puerto Rico and the Dominican Republic. The Company's operating expenses consist of the cost of the equipment, labor, facilities, fuel, inland transportation and administrative support necessary to move freight to and from Puerto Rico, the Dominican Republic and within the continental United States.

Three Months Ended March 31, 2009 Compared to the Three Months Ended March 31, 2008

For the three month period ended March 31, 2009, the Company had a net loss of $0.8 million compared to a net loss of $1.8 million in the same period of the previous year. The Company's operating income for the three month period ended March 31, 2009, was $1.8 million compared to operating income of $0.7 million in the same period of the previous year.

The following table sets forth the indicated items as a percentage of net revenues for the three months ended March 31, 2009 and 2008:

                     Operating Statement - Margin Analysis

                           (% of Operating Revenues)



                                                                      Three Months
                                                                     Ended March 31,
                                                                    2009         2008
Operating revenues                                                  100.0 %      100.0 %
Salaries, wages, and benefits                                        16.6         13.8
Purchased transportation and other rent                              22.3         25.6
Fuel                                                                 13.2         23.5
Operating and maintenance (exclusive of depreciation &
dry-docking shown separately below)                                  22.7         20.1
Dry-docking                                                           1.3          1.0
Taxes and licenses                                                    0.6          0.4
Insurance and claims                                                  3.2          2.4
Communications and utilities                                          0.8          0.6
Depreciation and amortization                                         6.1          5.1
(Gain) loss on sale of assets                                        (0.0 )        0.2
Other operating expenses                                              6.1          5.0

Total operating expenses                                             92.9         97.7
Operating income                                                      7.1          2.3
Net interest expense                                                (10.1 )       (8.4 )
(Provision) benefit for income taxes                                 (0.0 )        0.1

Net loss                                                             (3.0 )%      (6.0 )%

The Company's operating ratio, or operating expenses expressed as a percentage of revenue, improved from 97.7% of revenues during the three months ended March 31, 2008 to 92.9% of revenues during the three months ended March 31, 2009. This change is explained under the operating expenses caption below.

Revenues

The following table sets forth by percentage and dollar, the changes in the
Company's revenue and volume, measured by equivalent units:

     Volume & Revenue Changes in the first quarter of 2009 compared to 2008



                                                     Overall
                    Volume Percent Change:
                    Total Equivalent Units               (9.5 )%

                    Revenue Change (in millions):
                    Core Service Revenue            $    (3.2 )
                    Other Revenues                       (1.9 )

                    Total Revenue Change            $    (5.1 )

Vessel capacity utilization southbound was 84.7% for the three months ended March 31, 2009 compared to 72.4% for the three months ended March 31, 2008. The vessel capacity utilization increased due to the Company using one less vessel in liner service for the three months ended March 31, 2009. Vessel capacity utilization northbound was 25.5% for the three months ended March 31, 2009 compared to 20.3% for the three months ended March 31, 2008.

Revenue for the three months ended March 31, 2009 was $25.3 million, compared to $30.4 million for the three months ended March 31, 2008. This decrease in revenue was primarily due to decreased volume related to the economic slowdown and lower fuel surcharge rates. The Company's fuel surcharge, which is included in the Company's revenues, amounted to $3.1 million during the three months ended March 31, 2009 and $5.7 million during the three months ended March 31, 2008. The decrease in fuel surcharge revenue was primarily the result of decreases in the market price of fuel and the related surcharge and lower freight volumes. Net demurrage, a charge assessed for failure to return empty freight equipment on time less a demurrage related allowance for bad debt, is also included in the Company's revenues and amounted to $0.2 million during the three months ended March 31, 2009 compared to $0.4 million during the three months ended March 31, 2008. Total charterhire revenue amounted to $0.9 million during the three months ended March 31, 2009 compared to $0.6 million during the three months ended March 31, 2008. Charterhire is rental revenue for vessels not in use in a liner service.

Operating Expenses

Total operating expense for the Company decreased during the three months ended March 31, 2009 compared to the same period in 2008 primarily as a result of lower inland and marine variable costs due to lower volumes, one less barge in liner service, and decreases in the market price of fuel. Rent and purchased transportation decreased by $2.1 million or 27.1% primarily due to decreases in volume and decreases in fuel related components of inland purchased transportation. Fuel expense decreased $3.8 million or 53.4% due in part to decreased consumption related to the one less barge in service and market price decreases. As noted above, the fuel surcharge revenue collected by the company decreased $2.6 million from the prior year period. The category fuel expense does not include fuel related expenses associated with embedded inland purchased transportation that also experienced a significant decrease. The Company estimates that its fuel expense associated with purchased transportation decreased $1.0 million or 56.7%.

As a result of the factors described above, the Company reported a net loss of $0.8 million or $0.06 per basic and diluted share for the three months ended March 31, 2009 compared to net loss of $1.8 million or $0.15 per basic and diluted share in the same period in 2008.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operations was $3.5 million in the first three months of 2009 compared to $0.9 million in the first three months of 2008. This represents an increase of $2.6 million that resulted primarily from less prepaid tug fuel expense due to one less tug operating and lower marine fuel prices. The increase in net cash provided by operating activities was also a result of an improvement in net income of $1.0 million as well as a decrease in trade receivables resulting from increased collections. Net cash used in investing activities was approximately $1.8 million in the first three months of 2009 compared to net cash provided by investing activities of approximately $57,000 in 2008. The change is due primarily to the purchase of containers in the first three months of 2009. Net cash used in financing activities was $0.9 million in the first three months

of 2009 compared to $0.8 million in 2008. The change in net cash used in financing activities was partially attributable to debt payments partially offset by the exercise of stock options. At March 31, 2009, cash amounted to approximately $7.9 million, working capital was $7.9 million, and capital deficit was $2.4 million. The Company also had $4.2 million in a reserve fund for its two series of Ship Financing Bonds designated as its 7.07% Sinking Fund Bonds Due September 30, 2022 and 6.52% Sinking Fund Bonds Due March 30, 2023. These bonds are guaranteed by the U.S. government under Title XI of the Merchant Marine Act of 1936, as amended (the "Title XI Bonds").

The Company's revolving credit facility with Wachovia, as amended, provides for a maximum availability of $10 million and expires April 2012. The facility provides for interest equal to the prime rate. The revolving line of credit is subject to a borrowing base formula (approximately $8.2 million was available under this formula at March 31, 2009) based on a percentage of eligible accounts receivable. The revolving credit facility is secured by the Company's accounts receivable. At March 31, 2009, there were no advances drawn on this credit facility.

The Company has access to a term loan that provides for a maximum availability of $10 million and expires April 2012. The term loan provides for interest equal to the prime rate. At March 31, 2009, approximately $8.7 million was drawn on this loan to fund equipment purchases. This term loan is collateralized by eligible equipment with a carrying value of $16.1 million at March 31, 2009.

During the fourth quarter of 2008, the Company and Wachovia amended the Revolving Credit Agreement to eliminate all financial covenants at any time the Company has at least $3.0 million in unused borrowing capacity under the facility. As of March 31, 2009, the Company had $8.2 million available under this facility as calculated by the borrowing base formula mentioned above and therefore was not subject to the financial covenants.

As of March 31, 2009, the Company was restricted from performing certain financial activities due to it not being in compliance with debt covenants for its Title XI Bonds relating to certain leverage ratios. The provisions of the Title XI Bond covenants provide that, in the event of noncompliance with the covenants, the Company is restricted from conducting certain financial activities without obtaining the written permission of the Secretary of Transportation of the United States. If such permission is not obtained and the Company enters into any of the following actions it will be considered to be in default of the Title XI Bond covenants and the lender will have the right to call the debt. These actions are as follows: (1) acquire any fixed assets other than those required for the normal maintenance of its existing assets; (2) enter into or become liable under certain charters and leases (having a term of six months or more); (3) pay any debt subordinated to the Title XI Bonds; (4) incur any debt, except current liabilities or short term loans incurred in the ordinary course of business; (5) make investments in any person, other than obligations of U.S. government, bank deposits or investments in securities of the character permitted for money in the reserve fund; or (6) create any lien on any of its assets, other than pursuant to loans guaranteed by the Secretary of Transportation of the United States under Title XI of the Merchant Marine Act of 1936, as amended, and liens incurred in the ordinary course of business. As of March 31, 2009, the Company was in compliance with such restrictions.

CRITICAL ACCOUNTING POLICIES

The Company believes that there have been no significant changes to its critical accounting policies during the three months ended March 31, 2009, as compared to those the Company disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations in its Annual Report filed on Form 10-K for the year ended December 31, 2008.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, FASB issued SFAS No. 141 (revised 2007), "Business Combinations."This standard establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. This standard also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of SFAS 141 had no material impact on the Company's financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". This statement establishes a single authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. SFAS 157 defines fair value as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date". For the Company, SFAS 157 is

effective for the fiscal year beginning after November 15, 2007; however, the FASB has deferred the implementation of the provision of SFAS 157 relating to nonfinancial assets and liabilities until January 1, 2009. The adoption of SFAS 157 had no material impact on the Company's financial statements.

In April 2009, the FASB issued FSP No. 107-1 and APB No. 28-1, Interim Disclosures about Fair Value of Financial Instruments. FSP FAS No. 107-1 and APB No. 28-1 require disclosures about the fair value of financial instruments for annual and interim reporting periods of publicly traded companies. FSP No. 107-1 and APB No. 28-1 are effective for financial statements used for periods ending after June 15, 2009. The Company is currently evaluating the impact that FSP FAS No. 107-1 and APB No. 28-1 will have on its financial statements.

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the other-than-temporary impairment guidance for debt securities to make it more operational and to improve the presentation and disclosure of other-than-temporary-impairments of debt and equity securities in the financial statements. This FSP is effective for interim and annual reporting periods ending after June 15, 2009. Adoption of the FSP is not expected to have a material impact on the Company's financial statements.