<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

             (X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR
                   15 (d) OF THE SECURITIES AND EXCHANGE ACT OF
                   1934.

           For the quarterly period ended       SEPTEMBER 30, 1998

                                       OR

             ( )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                    OF THE SECURITIES AND EXCHANGE ACT OF 1934.

                For the period from                  to

                                                          COMMISSION FILE NUMBER

                                                                       000-11573

                          MARINE TRANSPORT CORPORATION
             (Exact name of registrant as specified in its charter)


                 DELAWARE                         13-2625280
        (State or other jurisdiction           (I.R.S. Employer
        incorporation or organization)         Identification No.)


   1200 HARBOR BOULEVARD, C-901, WEEHAWKEN, NJ   07082-0901
          (Address of principal                   (Zip Code)
           executive offices)

Registrant's telephone number, including area code  201-330-0200

         Former Name:                       OMI Corp.
         Former Address:                    90 Park Avenue
                                            New York, NY  10016
         Former Fiscal Year:                Not applicable

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                  Yes    /X/        No  / /

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF NOVEMBER 9, 1998:

            Common Stock, par value $0.50 per share, 5,892,605 shares
<PAGE>   2
                  MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
                                      INDEX

<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>                                                                                        <C>
PART I:   FINANCIAL INFORMATION                                                            3

ITEM 1.   FINANCIAL STATEMENTS

             Condensed Consolidated Statements of                                          4
               Operations for the three months and nine months
               ended September 30, 1998 and 1997

             Condensed Consolidated Balance Sheets-                                        5
               September 30, 1998 and December 31, 1997

             Condensed Consolidated Statements of Changes in                               6
               Stockholders' Equity for the year ended
               December 31, 1997 and the nine months ended
               September 30, 1998

             Condensed Consolidated Statements of Cash Flows for the nine                  7
               months ended September 30, 1998 and 1997

             Notes to Condensed Consolidated Financial                                     8
               Statements

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS                               12

PART II:  OTHER INFORMATION                                                                18

SIGNATURES                                                                                 19
</TABLE>

                                       2
<PAGE>   3
PART I: ITEM 1: FINANCIAL INFORMATION

SUMMARY OF CERTAIN TRANSACTIONS AFFECTING THE COMPANY

Marine Transport Corporation ("MTC" or "the Company"), formerly OMI Corp., was
established in its present form through a series of transactions, culminating
June 17, 1998, through which OMI Corp. split up and distributed to its
shareholders a subsidiary containing its international businesses (the
"Distribution") and then acquired Marine Transport Lines, Inc. in a
stock-for-stock exchange (the "Acquisition"). OMI Corp. then changed its name to
Marine Transport Corporation.

Upon completion of the Distribution, the assets, liabilities and equity related
to OMI Corp.'s international businesses were removed from the Company's balance
sheet at their recorded values. For periods prior to the Distribution, the
historical financial statements of the Company reflect the financial position
and results of operations of OMI Corp. as reported for such periods. For periods
subsequent to the Distribution and Acquisition, the Company's financial
statements include the assets, liabilities, equity and operations of OMI Corp.'s
domestic business and reflect the acquisition of Marine Transport Lines, Inc.
under the purchase method of accounting. The comparisons of financial position
and results of operations should be read with consideration of the above
transactions and presentations. Users of these financial statements should be
aware that future results of operations will significantly differ from the
historical results of operations because of the changes in the Company which
occurred as a result of the transactions described.

Notes 1 and 2 to the Condensed Consolidated Financial Statements of Marine
Transport Corporation and Subsidiaries more fully describe the Distribution and
Acquisition transactions and the impact of these transactions on the
consolidated financial statements.

                                       3
<PAGE>   4
                  MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                 FOR THE THREE                  FOR THE NINE
                                                                     MONTHS                         MONTHS
                                                                 ENDED SEPT 30,                 ENDED SEPT 30,
                                                               1998           1997           1998            1997
                                                               ----           ----           ----            ----
<S>                                                          <C>            <C>            <C>             <C>
Revenues:
  Voyage                                                     $ 25,381       $ 52,112       $ 138,143       $ 163,499
  Other                                                         5,047          2,506           9,202           5,885
                                                             --------       --------       ---------       ---------
    Total revenues                                             30,428         54,618         147,345         169,384
                                                             --------       --------       ---------       ---------

Operating expenses:
  Vessel and voyage                                            27,859         41,857         123,509         128,445
  Depreciation and amortization                                 3,746          7,149          18,080          21,584
  General and administrative                                    2,922          4,734          12,669          12,301
                                                             --------       --------       ---------       ---------
    Total operating expenses                                   34,527         53,740         154,258         162,330
                                                             --------       --------       ---------       ---------

Operating income (loss)                                        (4,099)           878          (6,913)          7,054

Other income (expense):
  Gain (loss) on disposal of assets                                                2             537             908
  Interest expense                                               (370)        (1,994)         (3,590)         (7,600)
  Equity in income (loss) of affiliates                           262         (3,796)          2,136            (216)
                                                             --------       --------       ---------       ---------
Net other income (expense)                                       (108)        (5,788)           (917)         (6,908)
                                                             --------       --------       ---------       ---------

Income (loss) before income taxes
  and cumulative effect of
  change in accounting principle                               (4,207)        (4,910)         (7,830)            146

Provision (benefit) for income taxes, including
  reversal of deferred income taxes of $38.9 million
  in the nine months ended September 30, 1998 resulting
  from the Distribution (see Note 5)                           (1,420)            21         (40,304)          1,127
                                                             --------       --------       ---------       ---------

Income (loss) before cumulative effect
  of change in accounting principle                            (2,787)        (4,931)         32,474            (981)
Cumulative effect of change in
  accounting principle, net of
  income taxes of $7,429                                                                                      13,797
                                                             --------       --------       ---------       ---------

Net income (loss)                                            $ (2,787)      $ (4,931)      $  32,474       $  12,816
                                                             ========       ========       =========       =========

Basic earnings per common share:
 Income (loss) before cumulative effect
   of change in accounting principle                         $  (0.46)      $  (1.15)      $    6.51       $   (0.23)
 Cumulative effect of change in
   accounting principal, net of
   income taxes                                                                                            $    3.22
 Net income (loss)                                           $  (0.46)      $  (1.15)      $    6.51       $    2.99
Diluted earnings per common share:
 Income (loss) before cumulative effect
   of change in accounting principle                         $  (0.46)      $  (1.15)      $    6.51       $   (0.22)
 Cumulative effect of change in
   accounting principal, net of
   income taxes                                                                                            $    3.15
 Net income (loss)                                           $  (0.46)      $  (1.15)      $    6.51       $    2.93
</TABLE>

See notes to condensed consolidated financial statements.

                                       4
<PAGE>   5
                  MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                 SEPT 30,       DECEMBER 31,
                                                   1998           1997(1)
                                                   ----           -------
                                               (UNAUDITED)
<S>                                             <C>             <C>
ASSETS
Current assets:
 Cash, including cash equivalents
  in 1997-$25,900                               $   5,110       $  32,489
 Receivables, less allowances of $520 in 1998
  and $528 in 1997                                 18,148          20,181
 Prepaid expenses and other current assets          4,140          18,732
                                                ---------       ---------
      Total current assets                         27,398          71,402

Capital construction fund                           4,029          10,969

Vessels and other property, at cost               105,402         518,709
Construction in progress                                           56,032
Less accumulated depreciation                     (65,839)       (204,516)
                                                ---------       ---------
Vessels, construction in progress
  and other property-net                           39,563         370,225

Vessel dry-docking costs                            7,065           1,818
Investments in and advances to/from
  affiliates                                        3,012          28,155
Note receivable                                     9,000           9,000
Other assets and deferred charges                  20,678          27,018
                                                ---------       ---------

TOTAL ASSETS                                    $ 110,745        $518,587
                                                =========        ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                               $  10,019       $   6,314
 Accrued liabilities                               10,060          22,931
 Current portion of long-term debt                  2,750          16,575
                                                ---------       ---------

      Total current liabilities                    22,829          45,820

Advance time charter revenues and other
 liabilities                                        2,903           3,114

Deferred gain on sale and leaseback
 of vessel                                         20,298          36,108
Deferred income taxes payable                      24,004          64,264

Long-term debt                                     25,991         146,341

Minority interest in subsidiary                                     1,917

Stockholders' equity                               14,720         221,023
                                                ---------       ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $ 110,745       $ 518,587
                                                =========       =========
</TABLE>


(1) The condensed balance sheet as of December 31, 1997 has been derived from
the audited financial statements as of that date.

See notes to condensed consolidated financial statements.

                                       5
<PAGE>   6
                  MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  FOR THE YEAR ENDED DECEMBER 31, 1997 AND THE
                   NINE MONTHS ENDED SEPT 30, 1998 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                        Unearned                       Accum.   
                                                           Common                      Compensation     Retained       Compre-  
                                                            Stock        Capital        Restricted      (Deficit)      hensive  
                                             Shares(1)    Amount(1)     Surplus(1)        Stock         Earnings       Income   
                                             ---------    ---------     ----------        -----         --------       ------   
<S>                                         <C>           <C>           <C>            <C>             <C>            <C>
                                                                                                                                
                                                                                                                                
Balance as of January 1, 1997                  4,269       $2,135       $ 203,462       $ (1,039)      $ (1,848)       $ 4,868   
                                                                                                                                
Comprehensive income:                                                                                                           
  Net income                                                                                             10,827                 
  Net change in valuation account                                                                                           22   
                                                                                                                                
                                                                                                                                
Comprehensive income                                                                                                            
                                                                                                                                
                                                                                                                                
Retirement of partner's equity                                                                                                  
  interest in joint venture                                                   777                                               
Retirement of minority stockholders'                                                                                            
  equity interest in subsidiary                                              (549)                                              
Exercise of stock options                         33             17         1,979                                               
Issuance of restricted stock awards                5              2           436           (438)                         --    
Amortization of unearned compensation                                                        372                                
                                             -----------------------------------------------------------------------------------
Balance at December 31, 1997                   4,307          2,154       206,105         (1,105)         8,979          4,890  
                                                                                                                                
Comprehensive income:                                                                                                           
  Net income                                                                                             32,474                 
  Net change in valuation account                                                                                       (4,943) 
                                                                                                                                
Comprehensive income                                                                                                            
                                                                                                                                
                                                                                                                                
Exercise of stock options                          5              2           210                                               
Retirement of minority stockholders'                                                                                            
  equity interest in subsidiary                                              (681)                                              
Amortization of unearned                                                                                                        
  compensation                                                                             1,105                                
                                                                                                                                
Issuance of common stock                       1,931            965        10,287                                               
                                                                                                                                
                                                                                                                                
Spin-off of foreign subsidiaries                                         (190,952)                      (54,048)                
                                                                                                                                
Purchase of treasury stock                                                                                                      
                                             -----------------------------------------------------------------------------------
Balance at Sept 30, 1998                       6,243         $3,121     $  24,969       $     --       $(12,595)      $    (53) 
                                             ===================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                              Other                         Total
                                              Compre-                        Share-
                                              hensive       Treasury        holders'
                                               Income         Stock          Equity
                                               ------         -----          ------
<S>                                          <C>            <C>           <C>
                                                            
                                                            
Balance as of January 1, 1997                                              $ 207,578
                                                                 
Comprehensive income:                                            
  Net income                                 $  10,827                        10,827
  Net change in valuation account                   22                            22
                                              --------      
                                                                  
Comprehensive income                         $  10,849            
                                             =========            
                                                                 
Retirement of partner's equity                                   
  interest in joint venture                                                      777
Retirement of minority stockholders'                             
  equity interest in subsidiary                                                 (549)
Exercise of stock options                                                      1,996
Issuance of restricted stock awards                                               --
Amortization of unearned compensation                                            372
                                            -----------------------------------------
Balance at December 31, 1997                                                 221,023
                                                                 
Comprehensive income:                                            
  Net income                                  $  32,474                       32,474
  Net change in valuation account                (4,943)                      (4,943)
                                              --------      
Comprehensive income                          $  27,531            
                                              =========            
                                                                 
Exercise of stock options                                                        212
Retirement of minority stockholders'                             
  equity interest in subsidiary                                                 (681)
Amortization of unearned                                         
  compensation                                                                 1,105
                                                                 
Issuance of common stock                                                      11,250
                                                                 
                                                                 
Spin-off of foreign subsidiaries                                            (245,000)
                                                                 
Purchase of treasury stock                                    (722)             (722)
                                            -----------------------------------------
Balance at Sept 30, 1998                                     $(722)        $  14,720
                                            =========================================
</TABLE>

(1) Restated to give retroactive effect to 1 for 10 reverse stock split.

See notes to condensed consolidated financial statements

                                       6
<PAGE>   7
                  MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                      FOR THE NINE
                                                                         MONTHS
                                                                      ENDED SEPT 30,
                                                                  1998              1997
                                                                  ----              ----
<S>                                                            <C>             <C>
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES               $    (700)      $     568

CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES:

 Additions to vessels and other property                         (61,418)        (44,886)

 Cash distributed as part of spin off of UBC's net assets        (12,600)

 Proceeds from Capital Construction Fund                           7,090

 Net proceeds from sale of vessels                                   708          78,972

 Payments for the retirement of minority
   stockholders' interest                                         (1,917)         (2,456)

 Purchase of MTL net of cash acquired                             (4,519)

 Proceeds and interest received and reinvested in the
   Capital Construction Fund                                        (203)           (552)
                                                               ---------       ---------

Net cash provided (used) by investing activities                 (72,859)         31,078
                                                               ---------       ---------

CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES:

 Proceeds from issuance of long-term debt                         72,637         114,090

 Payments on long-term debt                                      (36,774)       (171,374)

 Issuance of common stock                                         11,250           1,706

 Payments for debt issue costs                                      (211)           (636)

 Purchase of treasury shares                                        (722)
                                                               ---------       ---------
Net cash provided (used) by financing activities                  46,180         (56,214)
                                                               ---------       ---------

Net decrease in cash and cash equivalents                        (27,379)        (24,568)

Cash and cash equivalents at beginning of period                  32,489          47,877
                                                               ---------       ---------

Cash and cash equivalents at end of period                     $   5,110       $  23,309
                                                               =========       =========
</TABLE>

See notes to condensed consolidated financial statements.

                                       7
<PAGE>   8
                  MARINE TRANSPORT CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Marine Transport Corporation ("MTC" or the "Company") (formerly OMI Corp.) is a
U.S.-based company that owns and charters a fleet of ocean-going vessels which
it operates in domestic and international markets. The Company also manages
vessels for other shipowners.

On June 17, 1998 the Company distributed to its shareholders, in a tax-free
distribution (the "Distribution"), all of the shares of its wholly owned
subsidiary Universal Bulk Carriers, Inc. ("UBC"). UBC operated what were the
Company's foreign shipping businesses, and continues to operate those businesses
as OMI Corporation ("New OMI") under the Company's former management. Concurrent
with the Distribution, the Company acquired all of the outstanding common stock
of Marine Transport Lines, Inc. ("MTL"), a U.S.-based company that owns,
operates and manages U.S. and foreign flag vessels, in exchange for newly issued
shares of the Company's common stock (the "Acquisition"). The Company is managed
by certain officers formerly of MTL and certain former directors of MTL and
additional new directors. The Company trades under the symbol "MTLX" and is
listed on the NASDAQ National Market.

Unless otherwise indicated, amounts reflected in the accompanying financial
statements include the results of UBC through June 17, 1998, and the results of
MTL subsequent to June 17, 1998. Immediately following the Distribution and
Acquisition, the Company consummated a one-for-ten reverse stock split. All
share and per share amounts have been retroactively restated to reflect the
reverse stock split.

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. However, in the opinion of the
management of the Company, all adjustments (comprising only normal recurring
accruals) necessary for a fair presentation of operating results have been
included in the statements. Certain accounts have been reclassified in the 1997
financial statements to conform to their 1998 presentation. Reference is made to
OMI Corp.'s Form 10-K for the year ended December 31, 1997 and the Form S-1
filed on May 15, 1998 for additional information.

NOTE 2 - ACQUISITION AND DISTRIBUTION

As consideration for the Acquisition of MTL described above, the Company issued
approximately 1,931,000 shares, including 127,453 to be held in escrow pending
resolution of certain post-closing adjustments, (as adjusted for a one-for-ten
reverse stock split) in exchange for all of the outstanding shares of MTL. The
acquisition was valued at approximately $11,250,000 representing the Company's
estimate of the fair value of MTL at the date the transaction was announced, and
has been accounted for as a purchase.

The pro forma unaudited results of operations for the nine months ended
September 30, 1998 and September 30, 1997, assuming consummation of the
Acquisition and Distribution as of January 1, 1997 are as follows:

                                       8
<PAGE>   9
<TABLE>
<CAPTION>
                                                           Nine Months Ended Sept 30
                                                             1998            1997
                                                             ----            ----
<S>                                                        <C>            <C>
         Revenues                                          $ 93,924       $ 91,375
         Vessel, voyage and lease expense                    88,063         91,963
         General and administrative expense                  17,257         11,074
         (Loss) before other income (expense),
           income taxes, and cumulative
           effect of change in accounting
           principle                                        (11,396)       (11,662)
         Loss before cumulative effect of change
           in accounting principle                           (9,220)        (8,600)
         Net loss                                          $ (9,220)      $ (4,866)

         Basic and diluted earnings per common share:
         Loss before cumulative effect of change
           in accounting principle                         $  (1.85)      $  (1.13)
         Net loss                                          $  (1.85)      $  (1.13)
</TABLE>

As part of the Distribution, MTC is party to certain agreements with New OMI,
including the following:

Distribution Agreement-The Distribution Agreement provides for, with certain
exceptions, assumptions of liabilities and cross-indemnities designed
principally to place financial responsibility for the domestic-related assets
and liabilities with MTC and the foreign-related assets and liabilities with New
OMI. New OMI, however, assumed the obligations of the Company with respect to
the Company's 10.25 percent Senior Notes due November 1, 2003 in exchange for a
note in the amount of $6.8 million, which is equivalent in value to the
principal amount of the Senior Notes outstanding. The Distribution Agreement
also provides that each of MTC and New OMI will indemnify the other in the event
of certain liabilities arising under the Federal securities laws. Each of MTC
and New OMI will have sole responsibility for claims arising out of respective
activities after the Distribution.

The Distribution Agreement also provides that, except as otherwise set forth
therein or in any other agreement, all costs or expenses incurred on or prior to
the date of the Distribution in connection with the Distribution will be charged
to and paid by the party incurring such costs or expenses. Except as set forth
in the Distribution Agreement or any related agreement, each party shall bear
its own costs and expenses incurred after the date of the Distribution.

As part of the Distribution Agreement, New OMI has, subject to certain
exceptions, provided indemnity to MTC for all taxes attributable to the
Distribution and to certain corporate restructuring transactions preceding the
Distribution.

Tax Cooperation Agreement-Prior to the Distribution, MTC and New OMI entered
into a Tax Cooperation Agreement which sets forth each party's rights and
obligations with respect to federal, state, local and foreign taxes for periods
prior to and after the Distribution and related matters such as filing of tax
returns and conducting audits and other proceedings. In general, the Tax
Cooperation Agreement provides that New OMI will be liable for taxes and be
entitled to refunds for each period covered by any such return which are
attributable to New OMI and its subsidiaries. Though valid as between the
parties thereto, the Tax Cooperation Agreement is not binding on the IRS and
does not alter either party's tax liability to the IRS.

                                       9
<PAGE>   10
Acquisition Agreement-The Acquisition Agreement provides for an adjustment in
the purchase price of Marine Transport Lines, Inc. based on Working Capital
amounts as of the date of the Closing compared to certain pre-established
levels. The purchase price adjustment will be made by increasing or decreasing
the number of shares of the Company which were exchanged for MTL's shares.

NOTE 3 - ACCOUNTING CHANGE FOR VESSEL DRYDOCKING COSTS

Effective January 1, 1997, the Company changed its method of accounting for
vessel drydocking costs from the accrual method to the deferral method. Vessel
drydocking costs had been accrued and charged to operating expenses over the
period between drydockings, which is generally a two to three year period. Under
the deferral method, vessel drydocking expenses are capitalized and amortized
over the period until the next scheduled drydocking. Management believes the
deferral method better matches costs with revenues, and minimizes any
significant changes in estimates associated with the accrual method. The
cumulative effect of this accounting change is shown separately in the
consolidated statement of operations and resulted in income of $13,797,000 (net
of income taxes of $7,429,000), or $3.22 and $3.15 per basic and diluted share
for the nine months ended September 30, 1997. The three months and nine months
ended September 30, 1997 was previously presented using the accrual method of
accounting and has been restated to reflect this change.

NOTE 4 - EARNINGS PER COMMON SHARE

The computation of basic earnings per share is based on weighted average number
of common shares outstanding of 6,050,000 and 4,296,000 for the three months
ended September 30, 1998 and 1997, respectively, and 4,988,000 and 4,287,000 for
the nine months ended September 30, 1998 and 1997, respectively. The computation
of diluted earnings per share, which assumes the exercise of all dilutive stock
options using the treasury method, is based on the weighted average number of
common shares outstanding of 6,050,000 and 4,384,000 for the three months ended
September 30, 1998 and 1997, respectively, and 4,988,000 and 4,375,000 for the
nine months ended September 30, 1998 and 1997, respectively.

NOTE 5 - INCOME TAXES

As a result of the Distribution, the subsidiary holding the Company's foreign
shipping businesses became a decontrolled corporation for income tax purposes.
Accordingly, the Company will not be subject to income taxes applicable to the
future operations of these foreign businesses and the balance of deferred income
taxes of approximately $38,900,000 at the date of the Distribution related to
such operations was credited to income. This income tax credit accounts for all
of the Company's net income for the nine month period ended September 30, 1998
and will not recur in subsequent periods.

NOTE 6 - LONG-TERM DEBT AND CREDIT ARRANGEMENTS

At September 30, 1998 Long-Term Debt consisted of the following (in thousands):

<TABLE>
<CAPTION>
<S>                                        <C>
         MTL Term Loan                     $11,531
         MTC Term Loan                       8,393
         MTL Revolving Credit                1,000
         MTC Revolving Credit                1,000
         Subordinated Debt due to OMI        6,444
         Promissory Note due to OMI            373
                                           -------
         Total Debt                         28,741
         Less Current Portion                2,750
                                           -------
         Long-term Portion                 $25,991
                                           =======
</TABLE>

                                       10
<PAGE>   11
All debt at September 30, 1998 was created concurrently with the Acquisition.
Both the term loans and revolving credit facilities of the Company and its
wholly-owned subsidiary MTL accrue interest at a floating rate that is fixed for
brief periods (30-,60-,90, or 180-day periods) at the Company's discretion. The
interest rate is comprised of LIBOR (which, depending on the borrowing period
chosen, was approximately 5.25% at September 30, 1998) plus an incremental
margin determined by the Company's ratio of Total Debt to EBITDA (Earnings
Before Interest, Taxes, Depreciation and Amortization). That incremental margin
can range from a maximum of 2.25% (3.0x Total Debt to EBITDA) to a minimum of
1.25% (1.0x Total Debt to EBITDA). The Company pays commitment fees quarterly on
the unused and available portion of the revolving credit facilities at an annual
rate equal to the aggregate of forty percent of the applicable incremental
margin and one-quarter of one percent. At September 30, 1998 there was $1
million unused and available of the revolving credit facilities. The
subordinated debt is payable in semi-annual installments of principal and
interest through November 1, 2003. The promissory note is payable in semi-annual
installments of principal and interest through May 1, 2003.

On October 20, 1998, the Company effected an interest rate swap that fixed the
base LIBOR rate on the $19,923,659 then outstanding on the Term Loan portions of
Total Debt at 4.75% for a three-year period. The total interest rate on the Term
Loans, which previously had a rate base that floated at LIBOR, also includes an
incremental margin that is reset quarterly based on the Company's EBITDA
results. That incremental margin can range from a maximum of 2.25% (3.0x Total
Debt to EBITDA) to a minimum of 1.25% (1.0x Total Debt to EBITDA). There were no
transaction fees or other costs incurred in effecting this swap.

The term loans are payable in twenty quarterly installments that began in
September 1998; the first four installments total $500,000 each; the next
fifteen installments total $906,250 each; and the final installment of
$5,406,250 is due June 18, 2003. The revolving credit facility of the Company's
wholly-owned subsidiary, MTL, reduces to $1,000,000 on June 18, 2001; the
remaining revolving credit facilities expire on June 18, 2003.

Among other things, the Company's debt obligations restrict the Company's
ability to pay or declare dividends and require the Company to maintain certain
financial ratios, minimum cash balances, minimum asset values, and to use
proceeds of vessel sales to reduce debt. In addition, the Company's vessels are
pledged as collateral to secure the borrowings under the term loan and revolving
credit facility agreements. As of September 30, 1998, the Company was not in
compliance with certain of the financials convenants in the term loan and
revolving credit facility agreements for which waivers have been obtained. The
Company was in compliance with all other convenants included in the various
agreements and expects to be in full compliance with all convenants by December
31, 1998.

In addition to the above, as of September 30, 1998 MTL had borrowed $3,250,000
from its 50%-owned affiliate, Marine Car Carriers, Inc. under two unsecured
promissory notes that bear interest at 8%, payable quarterly in arrears. The
notes are due on June 5, 1999. The notes are shown on the balance sheet in
Investments in and advances to/from affiliates.

NOTE 7 - OTHER MATTERS

Pursuant to a prior charter agreement between a subsidiary of MTL and a
subsidiary of a bank (the "Bank"), MTL has indemnified the Bank for certain
investment tax credits previously utilized by the Bank to the extent such
credits may be disallowed by the Internal Revenue Service. These investment tax
credits are the basis for a claim by the Internal Revenue Service ("IRS")
against the Bank amounting to approximately

                                       11
<PAGE>   12
$5,000,000 as of September 30, 1998, including interest and penalties. MTL and
the Bank are contesting the IRS claim.

In May 1998, the IRS issued a Notice of Deficiency to the Bank. The tax
deficiency and interest, in a total amount of approximately $1.1 million, must
be paid to the IRS in order to contest this matter in a venue other than the Tax
Court. In accordance with the terms of the original charter agreement, the
Company plans to advance the $1.1 million to the Bank. The Bank and the Company
intend to continue to contest the IRS claim and to seek a refund for any amounts
paid, upon which the Bank will repay to the Company any amounts previously
advanced. Management believes it is probable that the Bank and the Company will
prevail in this matter. However, in the event that the Company and the Bank do
not prevail, the charter agreement requires that the Bank credit the Company for
any amounts advanced against any ultimate indemnification obligation.




PART I: ITEM 2:

MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS
             OF OPERATIONS

Marine Transport Corporation ("MTC" or "the Company"), formerly OMI Corp., was
established in its present form through a series of transactions, culminating
June 18, 1998, through which OMI Corp. distributed to its shareholders a
subsidiary containing its international businesses (the "Distribution") and then
acquired Marine Transport Lines, Inc. in a stock-for-stock exchange (the
"Acquisition"). OMI Corp. then changed its name to Marine Transport Corporation.

Upon completion of the Distribution, the assets, liabilities and equity related
to OMI Corp.'s international businesses were removed from the Company's balance
sheet at their recorded values. For periods prior to the Distribution, the
historical financial statements of the Company reflect the financial position
and results of operations of OMI Corp. as reported for such periods. For periods
subsequent to the Distribution and Acquisition, the Company's financial
statements include the assets, liabilities, equity and operations of OMI Corp.'s
domestic business and reflect the acquisition of Marine Transport Lines, Inc.
under the purchase method of accounting. The comparisons of financial position
and results of operations should be read with consideration of the above
transactions and presentations. Users of these financial statements should be
aware that future results of operations will significantly differ from the
historical results of operations because of the changes in the Company which
occurred as a result of the transactions described.

Certain pro forma financial information has been presented to give effect to the
Acquisition and Distribution as if such events had occurred on January 1, 1998.
The pro forma information does not purport to represent what the operations
actually would have been or to project operating results for any projected
period. The pro forma financial information is based on certain assumptions the
Company believes are reasonable. See Note 2 to the Condensed Consolidated
Financial Statements.

The information below and elsewhere in this document contains certain forward-
looking statements which reflect the current view of the Company with respect to
future events and financial performance, as well as potential impacts of the
Year 2000 issue on the Company. Wherever used, the words "expect", "plan",
"anticipate" and similar expressions identify forward-looking statements. Such
statements are based on management's current expectations and are subject to a
number of uncertainties and risks that could cause actual results to differ
materially from those described in the forward-looking statements. The Company
does not normally publicly update its forward-looking statements even if
experience or future changes make it clear that any projected results expressed
or implied therein will not be realized.

                                       12
<PAGE>   13
The following presentation of management's discussion and analysis of Marine
Transport Corporation's financial condition and results of operations should be
read in connection with the Condensed Consolidated Financial Statements,
accompanying notes thereto and other financial information appearing elsewhere
in this document, as well as the Form S-1 filed on May 15, 1998 which fully
describes the Acquisition and Distribution, and the documents incorporated by
reference thereto.

General

Marine Transport Corporation, formerly OMI Corp., is a U.S.-based supplier of
marine transportation services. Prior to the Acquisition and Distribution, its
major businesses were providing seaborne transportation services for crude oil
and refined petroleum products in two distinct international market segments:
Suezmax tankers and Handymax product tankers. These businesses were separated
from the Company and were distributed to the shareholders of the Company in the
Distribution. In addition, the Company provided lightering services in the Gulf
of Mexico, operated four tank vessels in the U.S. Jones Act trade and provided
ship management services to the U.S. government for its Ready Reserve Fleet.
Following the Distribution and Acquisition, the major businesses of the Company
are: marine transportation of chemicals, petroleum products and crude oil for
U.S.-based industrial customers, including lightering services for crude oil
customers in the Gulf of Mexico; and ship management services for third-party
ship owners and the U.S. government.

The Company's results of operations for the periods prior to the Acquisition and
Distribution, which were effective on June 17, 1998, include the operations of
the major businesses conducted by the Company prior to that date. The following
discussion of financial condition and results of operations is organized
accordingly.

Market Overview

Following the Acquisition and Distribution, the market for the Company's major
businesses can be described as follows:

Energy and Chemical Transportation: MTC provides an industrial shipping
philosophy, serving the chemical and petroleum liquid bulk market for large
commercial customers. In a number of cases, the Company has entered into
long-term contracts of affreightment providing for base amounts of cargo to be
shipped on an annual schedule of voyages on its vessels. Three vessels operate
under long-term contracts to third party customers who pay all direct costs of
operating the vessels. Spot market movements are used to fill out cargo capacity
on vessels not used for contract tonnage. Contracts are renewed periodically
(contract terms range from one to five years) and rate fluctuations due to a
changing market environment are generally not as large as experienced in the
spot market for chemical and petroleum tankers. Most of the Company's commercial
vessels operate in the protected U.S. Jones Act market. MTC also provides
lightering services in the Gulf of Mexico through its subsidiary MTL Petrolink.
The Company timecharters-in four international flag Aframax tankers, and
frequently charters in on a spot basis other vessels to augment its services.
MTL Petrolink provides assist vessels, equipment and personnel to discharge
large crude oil vessels offshore and deliver cargo to ports in the U.S. Gulf.
MTL Petrolink also provides vessel repair services.

Ship Management: MTC provides ship management services to industrial ship owners
who use vessels in parts of their own businesses, and to the U.S. government for
its Ready Reserve Fleet.  Ship management includes technical operation and
maintenance, crewing, regulatory compliance and other ship operating activities.
MTC manages one of the largest U.S. based fleets.  Management contracts range in
length from one to five years in remaining term.


                                       13
<PAGE>   14
Results of Operations

The Company's vessels operate, or have operated in prior years, on time,
bareboat or voyage ("spot") charters. Each type of charter denotes a method by
which revenues are recorded and expenses are allocated. Under a time charter,
revenue is measured based on a daily or monthly rate and the charterer assumes
certain voyage expenses, such as fuel and port charges. Under a bareboat
charter, the charterer assumes all voyage and operating expenses; therefore, the
revenue rate is likely to be lower than a time charter. Under a voyage charter,
revenue is calculated based on the amount of cargo carried, most expenses are
for the shipowner's account and the length of the charter is one voyage. Revenue
may be higher in the spot market, as the owner is responsible for most of the
costs of the voyage. Other factors affecting net voyage revenues for voyage
charters are waiting time between cargoes, port costs, and bunker prices.

Vessel expenses included in net voyage revenue discussed above include operating
expenses such as crew payroll/benefits/travel, stores, maintenance and repairs,
insurance and miscellaneous. These expenses are a function of the fleet size,
utilization levels for certain expenses and requirements under laws, by
charterers and Company standards. Insurance expense varies with the overall
insurance market conditions as well as the insured's loss record, level of
insurance and desired coverage.

Significant Adjustments Related to Distribution and Change in Accounting
Principle:

Net income for the nine months ended September 30, 1998 was $32.5 million
compared to $12.8 million for the nine months ended September 30, 1997. Included
in the 1998 income is a benefit of $38.9 million for federal income taxes. In
connection with the Distribution, the subsidiary holding OMI Corp.'s
international business became a decontrolled corporation for income tax purposes
and deferred income taxes, which had previously been recorded, were reversed.
Similar adjustments are not expected to occur in the future. Included in the
1997 income of $12.8 million is $13.8 million, net of income taxes, from the
cumulative effect of a change in accounting principle.

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO SEPTEMBER 30,
1997

Voyage revenues decreased by $26.7 million for the three months and by $25.4
million for the nine months ended September 30, 1998 compared to same periods in
1997. The primary reason for the substantial decreases in revenues is the
exclusion of the revenues and the results of operations of the Company's
international businesses for periods after the Distribution.

Other revenues for all periods presented primarily represents revenues from ship
management services, with the increases in ship management revenues for the 1998
periods attributable to the Acquisition of Marine Transport Lines, Inc..

Vessel and voyage operating expenses decreased by approximately $17.6 million
for the nine months ended September 30, 1998 as compared to the same period in
1997 primarily as a result of the impact of the Distribution (international
businesses that were separated from the Company in June, 1998). This decrease
was partially offset by the impact of the addition of vessels from Marine
Transport Lines, Inc., and the costs associated with the start up expenses of
activating three vessels that had been in extended lay-up periods.

Operating lease expenses included in vessel and voyage operating expenses
increased by $12.7 million and $500,000 for the nine month and three month
periods ended September 30, 1998, respectively, compared to the same periods in
1997 because of the Company's decision to charter in four Suezmax tankers during
the 1998 periods.

The consolidated operating losses for the three month and nine month periods
ended September 30, 1998 reflect planned out of service time for two commercial
vessels for scheduled repairs during the quarter. The lost revenue related to
these outages, cumulatively 57 days, was approximately $2.7 million. In
addition, costs related to activating three ships, which had been in lay-up
since 1997 amounted to almost $1 million for the quarter ended September 30,
1998. Two of these vessels went into operation in August 1998 on spot charters,
while the other vessel went on time charter to a major oil company for a
two-year period starting in October, 1998. 

                                       14
<PAGE>   15
The Company's lightering operations had improved results due to
increased oil imports to the US Gulf on larger tankers which use the Company's
lightering services.


General and administrative expense increased by $400,000 for the nine month
period ended September 30, 1998 as compared to the comparable period in 1997,
but decreased by $1.8 million for the three months ended September 30, 1998
compared to the same period in 1997. The decrease in general and administrative
expenses for the three month period reflect the substantial changes in
organizational structure and cost controls made by Company management after the
Acquisition and Distribution.

Interest expense was approximately $400,000 for the three months and $3.6
million for the nine months ended September 30, 1998. The significant decreases
in interest expense results from lower borrowings by the Company (mostly
impacted by the Distribution) as well as lower interest rates for current
periods. In October, 1998 the Company fixed interest rates on $19.9 million of
floating rate long term debt for three years through an interest rate swap (see
Note 6 to the Condensed Consolidated Financial Statements).


Losses from equity in operations of affiliates in 1997 relate to the sale of dry
bulk vessels in which the Company had minority interest; income from joint
ventures in 1998 result from strong markets for the Suezmax and ULCC vessels
owned by the applicable joint ventures in the 1998 periods.

The income tax benefit for the nine month period ended September 30, 1998
represents principally the reversal of deferred taxes at the distribution date
for the Company's foreign subsidiaries which became decontrolled corporations
though the Distribution; income taxes are no longer payable on the deferred
taxable income of those companies and the deferred taxes were reversed. For the
three-month period ended September 30, 1998, the income tax provision is similar
to the statutory rate. The income tax provision for the three month period ended
September 30, 1997 differed from statutory rates because taxes were not accrued
on some of the earnings results of the Company's investments in joint ventures
as management considered those earnings to be invested for an indefinite period.

BALANCE SHEET

MTC's balance sheet as of September 30, 1998 reflects both the Distribution and
Acquisition transactions whereas the balance sheet as of December 31, 1997
reflects the historical balance sheet of OMI Corp. prior to such transactions.

LIQUIDITY AND CAPITAL RESOURCES

As a result of planned out of service time of certain Company vessels as
described above, the Company posted operating losses for the three months and
nine months ended September 30, 1998. After adding back charges for depreciation
and amortization, net cash used in operations was significantly less than
operating losses for the quarter and nine month periods.

Cash balances of $5.1 million as of September 30, 1998 include cash drawn from
the Company's revolving credit line of $2 million, as well as $3.25 million
borrowed from a joint venture company at market rates and terms. Concurrent with
the Acquisition and Distribution, the Company restructured various loan
agreements, including those of Marine Transport Lines, Inc. At September 30,
1998, the Company had total borrowings under these agreements of $28.7 million,
which was one million dollars less than its total borrowing capacity under the
loan agreements at that date. Other forms of cash available for operations and
investment by the Company include additional cash balances of approximately $4.5
million in the joint venture company as well as $4 million included in the
Capital Construction Fund. Both of these amounts are before applicable income
taxes payable on amounts withdrawn from their current use.

                                       15
<PAGE>   16
During the three months ended September 30,1998 the Company used: $2.8 million
to reduce long-term debt balances; $3.7 million for planned repair and
activation of the Company's vessels as previously described; and $720,000 to
purchase 350,000 shares of the Company's Common Stock.

Cash balances and available credit lines are expected to be sufficient to meet
the Company's normal operating requirements, including scheduled payments of
long-term debt.

OTHER OPERATING MATTERS

The Company sold its vessel Savonetta in July 1998, and used the after tax
proceeds of $576,000 to reduce long term debt.

In July, 1998 MTC was awarded ship management contracts for four container
vessels operated for First Ocean Bulk Carriers and Lykes Lines.

In August, 1998 the Company completed negotiations with the owner of two
chemical/petroleum products vessels for the purchase of the vessels by the
Company by assumption of the outstanding mortgage debt on the vessels in the
aggregate amount of approximately $22.8 million.

In June, 1998 the Company was awarded contracts to manage ten vessels to replace
seventeen vessels currently managed under contracts with the U.S. Maritime
Administration which were due to expire in June, 1998. The Maritime
Administration subsequently rescinded awards to all awardees, and is
resoliciting proposals for management of its fleet. Expiring contracts have been
extended until November 30, 1998. Management expects further extensions of the
existing contract through at least December 31, 1998. The Company will resubmit
proposals to the Maritime Administration for new awards, but cannot anticipate
the outcome.

PRO FORMA FINANCIAL INFORMATION

Pro forma financial information included in the notes to the unaudited condensed
financial statements for the nine month periods ended September 30, 1997 and
1998 present certain historical financial information as if the Acquisition and
Distribution occurred on January 1, 1997. Although this pro forma financial
information is based on reasonable assumptions applied to past financial events,
management has taken certain actions subsequent to the Acquisition, which it
expects will improve the future operating results. These actions include:
reduction of salary and employment expenses, decrease in office rental
commitments and decreases in other administrative expenses which will reduce
total general and administrative expenses by approximately $8 million on an
annualized basis as compared to that amount allocated to OMI's Domestic Business
on a historical basis; employment of the laid up vessel Courier on a two year
charter at profitable rates, and implementation of plans for other laid up
vessels to profitably employ these vessels; and, expansion of the Company's ship
management business.

AGREEMENTS

As part of the Distribution, the Company is party to certain agreements with OMI
Corporation (New OMI), its former subsidiary. Certain provisions of these
agreements are summarized in Note 2 of the Condensed Consolidated Financial
Statements included herein. These agreements are included in the Company's Form
S-1 dated May 15, 1998.

EFFECTS OF INFLATION

The Company does not consider inflation to be a significant risk to the cost of
doing business in the foreseeable future. Inflation has a moderate impact on
operating expenses, drydocking expenditures and corporate overhead.

                                       16
<PAGE>   17
YEAR 2000

MTC management has identified the following areas of concern relating to the
Year 2000 issue, and has determined appropriate courses of action as described
below. Internally generated funds will be used to fund testing, improvements or
replacements where necessary.

Navigation of vessels: the potential impact of failure of embedded
      microprocessor chips on navigational equipment. All critical equipment on
      each of the Company's vessels has been identified and vendors have been
      contacted for certification for Year 2000 compliance. Where manufacturers
      cannot provide certification for critical equipment, non-compliant
      equipment will be replaced. Management does not anticipate material
      expenditures for certification or replacement.

Communications: the potential failure of computer equipment used for
      communications ship-to-shore and with other third parties ashore. All
      equipment used for ship-to-shore communication will be tested for
      compliance by the Company or an independent third party and will be
      replaced where necessary; most of this equipment consists of personal
      computers, off the shelf software and small servers. The cost of testing
      and replacement is not expected to be significant.

Operations: the potential failure of embedded microprocessor chips on power,
      steering and cargo systems aboard vessels. Critical machinery has been
      identified and will be surveyed and tested by Company personnel or
      independent third parties. Most systems have manual backup procedures or
      systems in the event of failure. Management expects to complete this
      testing prior to projected impact dates of Year 2000, but at this time is
      not certain of the costs of remediation of any identified problems.

Administration: the impact of Year 2000 problems on the Company's computer
      systems and those systems of third parties, such as vendors, customers and
      banks. The Company plans to replace existing administrative (including
      accounting) software and hardware used in related applications prior to
      the projected impact dates of Year 2000. The cost of replacement of these
      systems is expected to exceed $750,000. This expenditure was planned
      because of the recent changes in the Company's operation, but
      implementation has been accelerated as a result of identified Year 2000
      problems.

Management is not certain of the preparedness of all of its third party
relations, and the potential impact of failure of their systems on the Company's
results of operations, liquidity and financial condition. Interruption of
services provided by the Company's vessels could result from many factors for
which the Company relies on third parties, such as delivery of equipment, fuel
and personnel, availability of assist vessels to enter and leave ports,
availability of cargo to haul and capacity to discharge ashore and availability
of repair facilities. Management is aware that most of its important customers
(mostly large, multi-national companies), and the Company's banks, are studying
Year 2000 issues and implementing changes where appropriate.

                                       17
<PAGE>   18
                           PART II: OTHER INFORMATION

Item 1.              Legal Proceedings
                                    None

Item 2.              Changes in Securities.
                                    None

Item 3.              Defaults upon Senior Securities
                                    None

Item 4.              Submission of Matters to a Vote of Security Holders.
                                    None

Item 5.              Other Information
                                    None

Item 6.              Exhibits and Reports of Form 8-K

         (a)      Exhibits

         27.0     Financial Data Schedule, dated September 30, 1998

         (b)      Reports on Form 8-K.
                                      None

                                       18
<PAGE>   19
                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




Date: November 10, 1998
                                       MARINE TRANSPORT CORPORATION

                                       By:/s/ Richard T. du Moulin
                                          -------------------------------------
                                          Richard T. du Moulin
                                          President and Chief Executive Officer

Date: November 10, 1998
                                       By:/s/ Mark L. Filanowski
                                          -------------------------------------
                                          Mark L. Filanowski
                                          Senior Vice President and Chief
                                           Financial Officer

                                       19
<PAGE>   20

                                EXHIBIT INDEX
                                -------------


Exhibit No.       Description 
-----------       -----------

   27.0           Financial data schedule.1