<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-K
(Mark One)
[X]       ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934
          For the fiscal year ended December 31, 2000
                                 OR
[  ]      TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934
          For the transition period from              to

                        Commission File Number 000-23341

                          MOTOR CARGO INDUSTRIES, INC.
           (Exact Name of the Registrant as Specified in its Charter)

                   UTAH                                     87-0406479
     -------------------------------                    ------------------
     (State or other jurisdiction of                     (I.R.S. Employer
      incorporation or organization)                    Identification No.)

                             845 West Center Street
                           North Salt Lake, Utah 84054
                                 (801) 936-1111
          (Address of principal executive offices and telephone number)

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to section 12(g) of the Act:

                           Common Stock, no par value
                           --------------------------
                                (Title of Class)

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 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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/

As of March 20, 2001, the aggregate market value of the Registrant's voting
Common Stock held by non-affiliates of the Registrant based upon the last sale
price reported for such date on the Nasdaq National Market System was
approximately $16,033,414.

The number of shares of the Registrant's Common Stock outstanding as of March
20, 2001 was 6,473,140.

                       DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrant's definitive proxy statement pursuant to
Regulation 14A of the Securities Exchange Act of 1934 in connection with the
2001 Annual Meeting of Shareholders of the Registrant is incorporated by
reference into Part III of this Form 10-K.
<PAGE>

     This report contains certain forward-looking statements that involve risks
and uncertainties, including statements regarding the Company's plans,
objectives, goals, strategies and financial performance. The Company's actual
results could differ materially from the results anticipated in these
forward-looking statements as a result of certain factors set forth under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations-Cautionary Statement for Forward-Looking Information" and elsewhere
in this report.

                                     PART I

ITEM 1. BUSINESS

GENERAL

     Motor Cargo Industries, Inc. (the "Company") is a regional
less-than-truckload ("LTL") carrier that provides transportation and logistics
services to shippers within the western United States, including Arizona,
California, Colorado, Idaho, New Mexico, Oregon, Texas, Utah and Washington. The
Company transports general commodities, including consumer goods, packaged
foodstuffs, electronics, computer equipment, apparel, hardware, industrial goods
and auto parts for a diversified customer base. The Company offers a broad range
of services, including expedited scheduling and full temperature-controlled
service. Through its wholly-owned subsidiary, MC Distribution Services, Inc.
("MCDS"), the Company also provides customized logistics, warehousing and
distribution management services.

     The Company utilizes 30 strategically located service centers (also
referred to as "terminals") to serve major markets within the Company's service
region. In addition, the Company provides service to 24 smaller markets within
its service region pursuant to agreements with independent agents, most of which
act as exclusive agents for the Company. See Item 1 "Business - Operations."

THE LTL INDUSTRY

     The Company transports primarily LTL shipments. LTL shipments are shipments
weighing less than 10,000 pounds. Generally, LTL carriers transport freight from
multiple shippers to multiple consignees on a scheduled basis. Unlike truckload
carriers, LTL carriers typically do not transport full trailer loads directly
from origin to destination. LTL operations require the handling of shipments in
several coordinated stages.

     Typically, LTL carriers transport freight along scheduled routes from
multiple shippers to multiple consignees using a network of terminals, together
with fleets of tractors and trailers. Freight is picked up from customers by
local drivers and consolidated for shipment. The freight is then loaded into
inter-city trailers and transported to other terminals by linehaul drivers.
Large LTL carriers have traditionally employed a series of hub and spoke
terminals. This method improves truck utilization but requires expensive
multiple cargo rehandlings, and a fixed network of pickup, breakbulk and
destination terminals. At each breakbulk terminal, freight is unloaded and
reloaded with other freight destined for locations in the same general direction
of another breakbulk terminal, where the truck is sent for further unloading and
loading, until the freight arrives at a destination terminal located nearest the
delivery address of the consignee. At the destination terminal, freight is then
loaded onto a local truck for final delivery. The Company emphasizes direct
loading between the originating and destination service centers in order to
avoid the costly and time-consuming use of breakbulk terminals.

     LTL companies are generally categorized as regional, interregional or
national carriers, based upon length of haul and service territory. Carriers
with average lengths of haul less than 500 miles are referred to as regional
carriers and generally provide either overnight or second day service. Regional
LTL carriers usually are able to load freight for direct transport to a
destination terminal, thereby avoiding the costly and time-consuming use of
breakbulk terminals. Carriers with average lengths of haul between 500 and 1,000
miles are generally referred to as inter-regional carriers. National carriers,
with average lengths of haul greater than 1,000 miles, generally operate coast
to coast relying on networks of breakbulk and satellite terminals. Due to the
longer distances between major cities in the western United States, the Company
has a longer average length of haul than most other regional carriers. For the
year ended December 31, 2000, the Company had an average length of haul of
approximately 600 miles.

                                       2
<PAGE>

     In general, the more freight volume an LTL carrier has within a given
geographical area, the lower its incremental operating costs. This is
particularly true with respect to its pickup and delivery operations where
increased freight volumes generally result in less distance between stops and
more shipments per stop ("route density"). As route density increases, an LTL
carrier is able to make more deliveries on shorter routes, thereby increasing
the number of shipments that can be delivered within a defined period and
lowering overall labor costs for each shipment. Similarly, the more business a
carrier experiences in a given traffic lane from one service center to another
("lane density"), the lower its incremental costs. As lane density increases, a
carrier experiences increased revenue per mile, reduced empty miles and reduced
costs associated with intermediate shipment handling and reconsolidation. A
carrier's incremental costs are also improved as the amount of freight handled
at a given service center location ("service center density") increases. As
service center density improves, a carrier experiences higher revenues, while
maintaining the same fixed cost structure, thereby improving asset utilization.

OPERATIONS

     The Company picks up freight with pickup and delivery trucks during the day
and transports the freight to Company service centers by early evening. Pick-ups
and deliveries are typically made within a 70 mile radius of each service
center. Upon arrival at a service center, freight is unloaded, logged onto the
Company's computerized tracing system, and reloaded onto trailers destined for
the Company's other service centers. Trucks depart later in the evening for
their destination service centers. In order to ensure prompt service, the
Company enforces established time schedules for linehaul service between service
centers and utilizes an advanced computer system to track and coordinate
deliveries. Through the Company's wide area computer network, all vital
information relating to shipments is available to each service center on a
real-time basis. Before the cargo arrives at its destination service center, a
manifest showing the contents of each trailer and the sequence in which it is
loaded, along with the delivery bills, is generated by the Company's
computerized tracing system and is available to the destination service center
manager through the Company's computer network. Upon arrival at the destination
service center, the freight is unloaded, sorted and delivered to its final
destination by local delivery trucks.

     Instead of utilizing a complete "hub and spoke" system, which is typically
used by large, national LTL carriers, the Company emphasizes direct loading of
freight between service centers with minimal handling. Hub and spoke systems
generally require shipments to be loaded and unloaded several times at a number
of service centers and breakbulk facilities prior to delivery. Direct loading
allows shipments to be transported directly from the originating service center
to the destination service center without intermediate handling. Although the
Company uses both direct loading and hub and spoke handling, the Company's
primary emphasis on direct loading reduces the Company's costs because it
requires less loading and unloading of freight and requires fewer terminals and
breakbulk facilities.

     The Company uses a single service center, rather than multiple satellite
terminals, in each of the major cities it serves. Single service centers reduce
rehandling of freight, shorten delivery times and thereby reduce the risk of
freight damage or loss.

     In addition to the Company's 30 service centers, the Company also utilizes
independent agents in 24 smaller markets in which the Company does not operate
service centers. These agents are independent businesses that operate within a
specific area as the Company's pick-up and delivery agent. Shipments are
coordinated through these agents' facilities in the same manner as the Company's
service centers. Agents are compensated based upon a percentage of freight bill
revenue and are required to maintain standards established by the Company. The
Company believes that its use of agents in smaller markets helps the Company
maintain a lower fixed cost structure, improve local market presence and provide
customers with broader geographical coverage. The following table indicates the
location of each of the Company's service centers and agent facilities:

                                       3
<PAGE>

<TABLE>
<CAPTION>
          SERVICE CENTERS                             AGENT FACILITIES
          ---------------                             ----------------
<S>                                                   <C>
          Albuquerque, New Mexico                     Baker City, Oregon
          Bakersfield, California                     Battle Mountain, Nevada
          Boise, Idaho                                Beatty, Nevada
          Colorado Springs, Colorado                  Bend, Oregon
          Dallas, Texas                               Bishop, California
          Denver, Colorado                            Burns, Oregon
          El Paso, Texas                              Cedar City, Utah
          Eugene, Oregon                              The Dalles, Oregon
          Flagstaff, Arizona                          Elko, Nevada
          Fremont, California                         Ely, Nevada
          Fresno, California                          Hawthorne, Nevada
          Grand Junction, Colorado                    John Day, Oregon
          Imperial, California                        Kennewick, Washington
          Kent, Washington                            Kingman, Arizona
          Las Vegas, Nevada                           Klamath, Oregon
          Medford, Oregon                             LaGrande, Oregon
          North Salt Lake, Utah                       Lakeview, Oregon
          Oxnard, California                          Lovelock, Nevada
          Phoenix, Arizona                            Pendleton Oregon
          Pico Rivera, California                     Ridgecrest, California
          Pocatello, Idaho                            Tonopah, Nevada
          Portland, Oregon                            Wells, Nevada
          Redding, California                         Wendover, Utah
          Reno, Nevada                                Winnemucca, Nevada
          Rialto, California
          Sacramento, California
          San Diego, California
          Spokane, Washington
          Tucson, Arizona
          Twin Falls, Idaho
</TABLE>

     Approximately 45% of the Company's shipments are currently delivered
overnight, and an additional 33% of the Company's shipments are delivered within
two days. The Company uses single driver and two-person "sleeper" teams in its
linehaul operations. The Company also contracts with third parties for
transportation services ("purchased linehaul transportation") to supplement peak
demand periods and address lane imbalances. The Company obtains purchased
linehaul transportation from several sources, including truckload carriers and
independent contractors. By utilizing purchased linehaul transportation, the
Company is able to reduce empty miles and improve load factors.

     During the year ended December 31, 2000, the Company handled an average of
approximately 3,700 shipments per day with an average weight per shipment of
approximately 1,140 lbs. and average revenue per bill of approximately $132. The
Company's revenue per hundredweight was $11.55 for the year ended December 31,
2000.

     The Company's rates for LTL shipments are typically based on weight and
volume characteristics and the distance traveled. The Company periodically
publishes base rates that are generally applicable to customer shipments. The
Company typically offers special rates to customers based on tonnage levels and
other factors. In certain instances, the Company competes with other carriers
for business by participating in competitive bidding. Customers generally
solicit bids for relatively large shipment and tonnage volumes over a one or two
year period. These customers often enter into contractual relationships with a
limited number of carriers based upon price and service.

                                       4
<PAGE>

SPECIALIZED SERVICES

     The Company offers a broad range of services, including service
capabilities beyond the scope of most LTL carriers. These services include
PRIORITY+PLUS, an expedited time-definite service; PROTECTIVE+PLUS, a full
temperature-controlled service for LTL shipments within the Company's service
region; CANADIAN+PLUS, full points coverage into all major Canadian markets
through an exclusive regional marketing partnership with one of Canada's leading
LTL carriers and TRUCKLOAD+PLUS, a specialized truckload service designed to
meet the truckload needs of its customers at competitive rates. The Company also
provides less-than-container load service to Hawaii. The Company consolidates
shipments, loads containers and tenders them to a major transoceanic carrier for
transport to Hawaii. The shipments are then delivered by a local carrier in
Hawaii pursuant to an agreement between the carrier and the Company.

     In addition to the service offerings described above, the Company offers
customized services tailored to the ongoing needs of a particular customer.
These customized services often involve a high level of coordination between the
Company and the customer and may include time definite delivery, highly
specialized reporting requirements and electronic data interchange, full time
on-site loading by Company employees, return goods consolidation and management,
and specialized handling and equipment requirements.

     Through a program referred to as "Motor Cargo USA," the Company also
provides customers with service to points outside its core service region. The
Company enters into interline agreements with other carriers to provide delivery
of freight outside of the Company's core service region.

     The Company provides customized logistics, warehousing and distribution
management services through its subsidiary MCDS. MCDS currently provides
"just-in-time" delivery services for a small number of specialty retailers. One
customer currently accounts for more than 88% of the operating revenues of MCDS.
For the year ended December 31, 2000, $4.7 million or 3.6% of the Company's
revenues were generated by MCDS.

CUSTOMERS AND MARKETING

     The Company has approximately 3,800 regular customers with an average
monthly revenue billing of $1,000 or more. The Company's customers are not
concentrated in any one area or industry and no one customer accounts for over
4% of total revenues.

     The Company has positioned itself in the high service end of the regional
LTL market. The Company targets prospective customers that require high levels
of customized service and are not inclined to select a carrier solely on the
basis of price. The Company emphasizes its ability to provide specialized or
customized services to shippers, including (i) highly flexible scheduling, (ii)
consistent and expedited transit commitments, (iii) strong management
information systems and electronic data interchange capabilities, (iv)
commitment to customer service and responsiveness and (v) a willingness to
provide transportation programs outside the scope of the traditional LTL
industry.

     The Company has written contracts with most of its large customers. These
contracts specify rate levels and eliminate the need to negotiate rates for
individual shipments. The Company's contracts typically do not provide for
guaranteed volumes. Although the Company's contracts typically run for a
specified term of one year, they generally may be terminated by either party
upon 30 days' notice. The Company has pricing agreements with substantially all
of its customers that are not covered by contracts. These pricing agreements
specify rate levels but do not require minimum tonnage commitments on the part
of the customer.

     The Company's senior management is actively involved in the Company's sales
and marketing activities. In order to attract new customers, the Company relies
on its ability to provide quality service and on selective targeting of
potential accounts. The Company's account executives are managed by three
regional directors of sales. The account executives are responsible for
developing new business and maintaining relations with existing customers. The
Company also employs four corporate account managers. These corporate account
managers solicit business from corporate level decision-makers who are
responsible for freight shipments to locations within the Company's service
region.

                                       5
<PAGE>

     The Company has designed and implemented a sales force automation system,
which provides for improved contact and opportunity management, improved sales
forecasting and simplified reporting. The Company maintains comprehensive
customer base profiles of existing and prospective customers. Using this
database, key strategic and account development information is updated daily by
the Company's sales force using automated processes. The Company utilizes this
resource to track emerging opportunities and direct highly targeted and
precisely timed marketing messages to existing and prospective customers.

DRIVERS, INDEPENDENT CONTRACTORS AND OTHER PERSONNEL

     At December 31, 2000, the Company employed 1,726 persons in the following
categories:

<TABLE>
<CAPTION>
             CATEGORY                                    NO. OF EMPLOYEES
             --------                                    ----------------
<S>                                                      <C>
     Full time drivers                                        632
     Part time drivers and dock workers                       557
     Salaried and clerical                                    394
     Warehousemen                                              10
     Mechanics and Maintenance                                 82
     Sales and sales management                                51
</TABLE>

     At December 31, 2000, the Company employed 192 linehaul drivers and 493
pick-up and delivery drivers. The Company selects its drivers based upon
experience and driving records. Pursuant to DOT regulations, drivers are
required to pass drug tests prior to employment and periodically thereafter. The
trucking industry experiences driver shortages from time to time; however, the
Company has maintained an adequate and qualified driver force. The Company
compensates linehaul drivers on a per-mile basis. Pick-up and delivery drivers
are compensated on an hourly basis.

     In addition to its employee drivers, the Company utilized approximately 67
linehaul drivers as of December 31, 2000, pursuant to an agreement with FHF
Transportation, Inc. ("FHF"). These drivers operate tractors owned by the
Company but are not employees of the Company. The Company makes payments to FHF
based upon mileage.

     The Company supplements its linehaul fleet with the use of approximately 16
independent contractors. Because independent contractors provide their own
tractors, independent contractors provide the Company with an alternative method
of obtaining the use of additional revenue equipment with reduced capital
investment. This approach reduces costs and maximizes flexibility by quickly
providing additional linehaul capacity during periods of peak demand. Further,
because independent contractors are compensated at a contracted rate per mile,
the use of independent contractors helps the Company reduce fixed overhead and
improve asset utilization. Independent contractors also allow the Company to
better adjust to seasonal fluctuations in shipping volumes.

     Approximately 11% of the Company's employees are covered by two separate
collective bargaining agreements relating to employees at the Company's North
Salt Lake, Utah and Reno, Nevada service centers. Although these agreements
cover most of the employees at these two facilities, less than half of these
employees are actually members of unions. These unions are affiliated with the
International Brotherhood of Teamsters, but the contracts are not tied to the
Teamsters National Master Contract. The Company's agreement with North Salt Lake
employees expires on November 30, 2002, and the Company's Agreement with Reno
employees expires on November 30, 2003. Both agreements provide for automatic
renewal from year to year after expiration, subject to the right of either party
to cancel or terminate the agreement upon at least 60 days' notice prior to the
date of expiration.

                                       6
<PAGE>

SAFETY AND INSURANCE

     The Company emphasizes safety in all aspects of its operations. The Company
employs a Director of Safety and Compliance who has over 25 years of
safety-related experience with the Company. Each of the Company's terminals
conducts its own safety program and all tractors in use are inspected daily by
Company personnel. The Company has also established guidelines for hauling
hazardous materials. The Company earned the highest DOT safety and fitness
rating of "satisfactory" during its last audit.

     The Company currently maintains liability insurance for bodily injury and
property damage in the amount of $30 million, with a self retention amount of
$250,000 per incident, and cargo insurance in the amount of $1 million, with a
self retention amount of $100,000, per incident. An aggregate self retention
amount of $250,000 per incident applies to incidents involving both liability
and cargo claims. The Company maintains various insurance coverage on buildings
and contents and is self-insured with respect to physical damage to other
properties and equipment. The Company also maintains workers' compensation
insurance in all states in which the Company operates. At December 31, 2000,
there was no deductible in any state except Nevada, which has a $250,000
deductible. Subsequent to December 31, 2000, the Company modified the terms of
its workers' compensation insurance to establish a deductible of $250,000 in all
states other than Washington, which has no deductible.

REVENUE EQUIPMENT

     At December 31, 2000, the Company operated a fleet of 644 tractors and
trucks and 2,526 trailers. The Company uses new linehaul tractors in linehaul
operations for approximately five years. After five years of use, the Company
trades in used linehaul tractors and purchases new linehaul tractors. The table
below reflects, as of December 31, 2000, the average age of the type of
equipment, and the number of respective units:

<TABLE>
<CAPTION>
                                                             NUMBER        AVERAGE
     TYPE OF EQUIPMENT (CATEGORIZED BY PRIMARY USE)         OF UNITS         AGE
     ----------------------------------------------         --------       -------
<S>                                                         <C>            <C>
     Linehaul tractors                                         225           2.3
     Pick-up and delivery tractors                             360           3.8
     Pick-up and delivery trucks                                59           6.2
     Trailers                                                2,526           6.5
</TABLE>

     The Company lowers its cost structure through the use of 28 foot trailers
in doubles combinations and, where permitted by state regulations, triples
combinations in its linehaul operations. These 28 foot trailers allow for more
direct loading and minimize handling costs and exposure. In addition, the
Company improves linehaul trailer utilization and reduces potential damages and
cargo claims expenses by using logistic deck trailers and pallet decks. This
specialized equipment minimizes damage and maximizes trailer utilization.

     The Company maintains its revenue equipment through the use of its own
maintenance facilities as well as outside vendors. The Company's service centers
in Pico Rivera, Las Vegas, Reno, Denver, Phoenix, Portland and North Salt Lake
have maintenance facilities. In addition to scheduled maintenance on its
equipment, the Company also performs occasional equipment modifications designed
to improve operating performance and reduce operating costs of equipment. All
data regarding equipment costs, depreciation, mileage and maintenance are
recorded on the Company's computer system, allowing management to access
equipment records quickly and plan scheduled maintenance efficiently.

FUEL AVAILABILITY AND COST

     Fuel, excluding fuel taxes, comprised approximately 5.2% of the Company's
total operating expenses during the year 2000. Generally, in order to obtain
lower fuel costs and greater flexibility in fueling its fleet, the Company
purchases its own fuel in bulk and requires its drivers to fuel at Company
terminals. The Company emphasizes fuel economy through the use of modern,
fuel-efficient equipment, driver and mechanic training programs and aerodynamic
improvements. Although fuel constitutes a much lower percentage of costs to the
Company than it would to a full truckload carrier, increases in fuel prices or
fuel taxes, shortages of fuel or rationing of petroleum products could have a
material adverse effect on the operations and profitability of the Company.

                                       7
<PAGE>

     Generally, in times of sharp fuel price increases, the Company implements
fuel surcharges. Because of the highly competitive nature of the market for LTL
services, the Company generally must wait for larger carriers to implement fuel
surcharges before the Company can effectively implement fuel surcharges. The
Company presently has a sliding scale fuel surcharge based on a fuel price index
for the west coast. Due to increased fuel costs first occurring during the third
quarter of 1999, the Company implemented a fuel surcharge in accordance with the
fuel price index in order to limit the impact of fuel costs in future periods.
The fuel surcharge remained in effect throughout the year 2000. The Company will
respond to any further increases in fuel costs with corresponding increases in
the fuel surcharge in accordance with the fuel price index. Although the fuel
surcharge reduces the impact of rising fuel costs, increased fuel prices can
nevertheless have an adverse effect on the operations and profitability of the
Company due to the difficulty of imposing and collecting the surcharge.

COMPETITION

     The transportation industry is highly competitive on the basis of both
price and service. The Company competes with regional, interregional and
national LTL carriers and, to a lesser extent, with truckload carriers,
railroads and overnight delivery companies. Several large LTL carriers operate
within the Company's core service region. Some of the Company's competitors are
divisions or subsidiaries of larger trucking companies, railroad companies or
air delivery companies. Many of the Company's competitors have greater financial
resources, more equipment and greater freight capacity than the Company. Certain
carriers occasionally experience periods of overcapacity during which these
carriers reduce prices in order to increase utilization of revenue equipment.
The Company believes that it is able to compete effectively in its markets by
providing high quality customized service at competitive prices.

REGULATION

     The Motor Carrier Act of 1980 significantly deregulated the trucking
industry and increased competition among motor carriers. Following enactment of
the Motor Carrier Act, applicants have obtained operating authority more easily,
and interstate motor carriers such as the Company are able to change their rates
and services with less regulatory oversight and delay. The Motor Carrier Act
also removed many route and commodity restrictions affecting transportation of
freight.

     Effective January 1, 1995, Section 601 of the Federal Aviation
Administrative Authorization Act and the Trucking Industry Regulatory Reform Act
("TIRRA") substantially deregulated intrastate operating authority. Prior to
TIRRA, the Company maintained intrastate authority in California, Nevada and
Utah. Subsequent to TIRRA, the Company obtained intrastate authority in
Colorado, Oregon, New Mexico, Washington and Texas.

     The Company was regulated by the ICC until the ICC Termination Act of 1995
abolished the ICC effective January 1, 1996. The Surface Transportation Board,
an independent entity within the DOT, assumed many of the responsibilities of
the ICC. The Company is also regulated by various state agencies. These
regulatory authorities have broad powers, generally governing matters such as
authority to engage in motor carrier operations, rates, certain mergers,
consolidations and acquisitions, and periodic financial reporting. The trucking
industry is subject to regulatory and legislative changes that can affect the
economics of the industry by requiring changes in operating practices or
influencing the demand for, and the costs of providing services to, shippers.

     Interstate motor carrier operations are subject to safety requirements
prescribed by the DOT. Such matters as weight and dimensions of equipment are
also subject to federal and state regulation. The use of triple trailers is
subject to state regulation and is prohibited by several states within the
Company's core service region. The Company is subject to federal, state and
local environmental laws and regulations governing the management of hazardous
wastes, other discharge of pollutants into the air and surface and underground
waters, and the disposal of certain substances. These regulations extend to the
Company's above-ground and underground fuel storage tanks. The Company believes
that all of its fuel storage tanks are in compliance with applicable
regulations. The Company also believes that it is in material compliance with
all other applicable environmental laws and regulations and does not believe
that the cost of future compliance should have a material adverse effect on the
Company's operations or financial condition.

                                       8
<PAGE>

ITEM 2. PROPERTIES

     The Company owns its executive offices, located in North Salt Lake, Utah,
consisting of a two-story building of approximately 21,377 square feet. Of the
30 service centers used by the Company as of December 31, 2000, 11 were owned,
19 were leased. These facilities range in size according to the markets served.
The Company has not experienced and does not anticipate difficulties in renewing
existing leases on favorable terms or obtaining new facilities as and when
required. The following table shows the location of each service center owned or
leased by the Company as of December 31, 2000.

<TABLE>
<CAPTION>
               LOCATION                       # OF DOORS        OWNED OR LEASED       LEASE EXPIRATION
               --------                       ----------        ---------------       ----------------
<S>                                           <C>               <C>                   <C>
           Pico Rivera, CA                        102                Leased           December 2013
           Rialto, CA                              78                Owned
           North Salt Lake, UT                     77                Owned
           Denver, CO                              81                Owned
           Fremont, CA                             60                Leased           August 2007
           Portland, OR                            34                Owned
           Reno, NV                                88                Owned
           Sacramento, CA                          30                Owned
           Kent, WA                                30                Owned
           Boise, Idaho                            20                Leased           June 2002
           Phoenix, AZ                            118                Owned
           El Paso, TX                             20                Owned
           Las Vegas, NV                           20                Owned
           San Diego, CA                           20                Leased           May 2001
           Fresno, CA                              20                Leased           October 2001
           Albuquerque, NM                         12                Leased           October 2001
           Oxnard, CA                               9                Leased           Month-to-month
           Bakersfield, CA                          9                Leased           October 2002
           Tucson, AZ                              28                Leased           March 2004
           Medford, OR                              8                Leased           July 2002
           Spokane, WA                             11                Leased           December 2002
           Colorado Springs, CO                     7                Leased           August 2001
           Grand Junction, CO                      16                Leased           May 2003
           Twin Falls, ID                           6                Owned
           Dallas, TX                              23                Leased           May 2002
           Pocatello, ID                            2                Leased           September 2001
           Imperial, CA                             2                Leased           Month-to-month
           Flagstaff, AZ                            2                Leased           Month-to-month
           Redding, CA                              3                Leased           Month-to-month
           Eugene, OR                               8                Leased           November 2004
</TABLE>

     The following additional property is owned by the Company but is not
currently being used in its operations.

<TABLE>
<CAPTION>
          Location      # of Doors    Owned or Leased
          --------      ----------    ---------------
<S>                     <C>           <C>
          Denver, CO        36             Owned
</TABLE>

     The Company also leases a sales office in Chicago pursuant to a lease that
expires in November 2001. The Company's subsidiary, MCDS, leases an aggregate of
108,900 square feet of warehouse space in southern California pursuant to two
leases that expired in January 2001 and February 2001. In addition, MCDS leases
82,300 square feet of warehouse space in York, Pennsylvania, pursuant to a lease
that expires in June 2001, and 7,400 square feet of warehouse space in Las
Vegas, Nevada pursuant to a month-to-month lease.

                                       9
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

     The Company is routinely a party to litigation incidental to its business,
primarily involving claims for personal injury or property damage incurred in
the transportation of freight. The Company maintains insurance to cover
liabilities in excess of self-insured amounts. The Company's management is not
aware of any claims or threatened claims that it believes are likely to exceed
insurance limits or have a materially adverse effect upon the Company's
operations or financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS

     The Company did not submit any matter to a vote of security holders during
the fourth quarter of 2000.

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

     The Company's Common Stock is traded on the Nasdaq Stock Market (National
Market) under the symbol "CRGO". At March 8, 2001, there were approximately 450
holders of the common stock, including 36 shareholders of record.

     The following table sets forth the high and low sales prices for the
Company's common stock as reported by the Nasdaq National Market System by
quarter, for the years ended December 31, 2000 and 1999.

<TABLE>
<CAPTION>
                                    YEAR ENDED
     QUARTER        ------------------------------------------
      ENDED         DECEMBER 31, 2000        DECEMBER 31, 1999
     -------        -----------------        -----------------
                    HIGH         LOW         HIGH         LOW
                    ----        -----        ----        -----
<S>                 <C>         <C>          <C>        <C>
       3/31         5.375       4.000        $8.500     $4.000
       6/30         6.000       4.250         8.906      5.000
       9/30         6.125       4.500         8.500      6.125
      12/31         7.609       5.000         7.188      3.375
</TABLE>

     The Company has never declared or paid any cash dividends on its capital
stock and does not anticipate paying any cash dividends in the foreseeable
future.

                                       10
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

     The following selected financial data have been summarized from the
Company's consolidated financial statements and are qualified in their entirety
by reference to, and should be read in conjunction with, such consolidated
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," under Item 7 below.

                      SELECTED CONSOLIDATED FINANCIAL DATA
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>

                                                                                    Year ended December 31,
                                                         -------------------------------------------------------------------------
                                                           1996            1997            1998            1999            2000
                                                         ---------       ---------       ---------       ---------       ---------
<S>                                                      <C>             <C>             <C>             <C>             <C>
STATEMENT OF EARNINGS DATA:
   Operating revenues                                    $  92,310       $ 105,381       $ 114,725       $ 125,310       $ 131,112
   Operating expenses
      Salaries, wages and benefits                          39,666          45,257          51,747          59,502          65,166
      Operating supplies and expenses                       14,947          15,706          15,974          20,342          21,812
      Purchased transportation                              14,164          15,389          17,974          15,580          11,870
      Operating taxes and licenses                           3,531           3,519           3,885           4,731           5,048
      Insurance and claims                                   2,785           4,478           3,651           3,826           3,381
      Depreciation and amortization                          6,578           6,998           7,928           8,822           8,772
      Communications and utilities                           1,784           1,896           1,924           2,023           2,176
      Building rents                                         1,540           1,745           2,365           3,043           3,423
      Gain on sale of equipment                                 71            (142)           (103)           (241)           (206)
                                                         ---------       ---------       ---------       ---------       ---------
         Total operating expenses                           85,066          94,836         105,345         117,628         121,442
                                                         ---------       ---------       ---------       ---------       ---------
         Operating income                                    7,244          10,545           9,380           7,682           9,670
   Other income (expense)
         Interest expense                                   (1,430)         (1,051)           (154)           (139)           (158)
         Other, net                                            (39)            (79)            223             110             988
                                                         ---------       ---------       ---------       ---------       ---------
   Earnings before income taxes                              5,853           9,573           9,449           7,653          10,500
   Income taxes                                              2,118           3,805           3,660           3,000           4,080
                                                         ---------       ---------       ---------       ---------       ---------
   Net earnings                                          $   3,735       $   5,768       $   5,789       $   4,653       $   6,420
                                                         =========       =========       =========       =========       =========
   Earnings per common share - basic and diluted                                         $     .83       $     .67       $     .95
   Weighted-average shares outstanding - diluted                                             6,992           6,941           6,739
   Pro forma (1)
      Earnings before income taxes                       $   5,853       $   9,573
      Income taxes                                           2,256           3,952
                                                         ---------       ---------
      Net earnings                                       $   3,597       $   5,621
                                                         =========       =========
      Earnings per common share - basic                  $    0.63       $    0.95
                                                         =========       =========
      Weighted-average shares outstanding - basic            5,820           5,939
                                                         =========       =========
      Earnings per common share - diluted                $    0.62       $    0.95
                                                         =========       =========
      Weighted-average shares outstanding - diluted          5,820           5,939
                                                         =========       =========
</TABLE>

<TABLE>
<CAPTION>
                                                                                       December 31,
                                                         -------------------------------------------------------------------------
                                                           1996            1997            1998            1999              2000
                                                         ---------       ---------       ---------       ---------       ---------
<S>                                                      <C>             <C>             <C>             <C>             <C>
BALANCE SHEET DATA:
   Current assets                                        $  23,197       $  26,965       $  26,775       $  27,090       $  29,642
   Current liabilities                                      15,752          11,597          10,741          11,641          12,327
   Total assets                                             63,834          68,069          72,660          80,570          85,365
   Long-term obligations, less current maturities           16,820           6,492           5,390           8,021           8,015
   Total liabilities                                        37,794          24,618          23,386          26,929          27,864
   Stockholders' equity                                     26,040          43,451          49,275          53,641          57,501
</TABLE>

(1)  Effective August 28, 1997, the Company acquired the membership interests of
     Ute, a Utah limited liability company. A limited liability company passes
     through to its members essentially all taxable earnings and losses and pays
     no tax at the company level. Accordingly, for comparative purposes, a pro
     forma provision for income taxes using an effective income tax rate of
     approximately 38% has been determined assuming Ute had been taxed as a C
     corporation for all periods presented.

                                       11
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The purpose of this section is to discuss and analyze the Company's
consolidated financial condition, liquidity and capital resources and results of
operations. This analysis should be read in conjunction with the consolidated
financial statements and related notes which appear elsewhere in this report.
This section contains certain forward-looking statements that involve risks and
uncertainties, including statements regarding the Company's plans, objectives,
goals, strategies and financial performance. The Company's actual results could
differ materially from the results anticipated in these forward-looking
statements as a result of factors set forth under "Cautionary Statement for
Forward-Looking Information" below and elsewhere in this report.

OVERVIEW

RESULTS OF OPERATIONS

     The following table sets forth the percentage relationship of certain items
to revenues for the periods indicated:

<TABLE>
<CAPTION>
                                               Year ended December 31,
                                           --------------------------------
                                            1998         1999         2000
                                           ------       ------       ------
<S>                                        <C>          <C>          <C>
Operating revenues                         100.0%       100.0%       100.0%
Operating expenses
    Salaries, wages and benefits            45.1         47.5         49.7
    Operating supplies and expenses         13.9         16.2         16.6
    Purchased transportation                15.7         12.5          9.0
    Depreciation and amortization            6.9          7.0          6.7
    Insurance and claims                     3.2          3.1          2.6
    Operating taxes and licenses             3.4          3.8          3.9
    Communications and utilities             1.7          1.6          1.7
    Building rents                           2.0          2.4          2.6
    Gain on sale of equipment               (0.1)        (0.2)        (0.2)
                                           -----        -----        -----
          Total operating expenses          91.8         93.9         92.6
                                           -----        -----        -----
Operating income                             8.2          6.1          7.4
Other income (expense)
    Interest expense                        (0.1)        (0.1)        (0.1)
    Other, net                               0.2          0.1          0.7
                                           -----        -----        -----
Earnings before income taxes                 8.3          6.1          8.0
Income taxes                                 3.2          2.4          3.1
                                           -----        -----        -----
Net earnings                                 5.1%         3.7%         4.9%
                                           =====        =====        =====
</TABLE>

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

     Operating revenues increased 4.6% in 2000 to $131.1 million from $125.3
million in 1999. The increase was primarily attributable to an improved yield on
freight hauled, the benefit from a fuel surcharge and a reduction in lower-yield
freight as a percentage of total tonnage as a result of the Company's account
rationalization program.

     Average revenue per shipment increased 8.3% to $131.95 in 2000 compared to
$121.82 in 1999. Revenue per hundredweight increased to $11.55 in 2000 from
$11.02 for 1999. The number of shipments during 2000 decreased by 3.8% to
961,630, compared to 999,563 for 1999. Tonnage decreased by 0.6% to $549,285 in
2000, compared to 552,412 in 1999.

     The Company's warehouse and distribution management company, MCDS,
contributed $4.7 million of the $131.1 million in operating revenues for the
year ended December 31, 2000, compared to $4.1 million for the year ended
December 31, 1999. The increase was due primarily to increased revenue from
existing accounts as well as the addition of some smaller new accounts.

                                       12
<PAGE>

     As a percentage of operating revenues, salaries, wages, and benefits
increased to 49.7% for the year ended December 31, 2000 from 47.5% for 1999. The
increase was due primarily to the use of more Company line drivers instead of
purchased transportation. The average number of full time line drivers employed
by the Company increased approximately 29% to 161 during 2000, compared to 125
in 1999. At December 31, 2000, there were 187 full time line drivers compared to
145 on December 31, 1999. Salaries and wage rates increased approximately 4% in
2000 compared to 1999.

     Operating supplies and expenses increased to 16.6% of operating revenue in
2000 compared to 16.2% in 1999. Contributing to this increase were the costs of
fuel, parts, tires and repairs associated with the increased use of Company
owned vehicles instead of purchased transportation during 2000. In addition, the
price of fuel averaged approximately $0.36 more per gallon during 2000 over
1999. Higher fuel prices resulted in additional costs of approximately $2.3
million, or 1.75% of operating revenues in 2000 compared to 1999. Other costs
including agent commissions were reduced in 2000 compared to 1999. This was
partially the result of converting two agencies to Company-owned facilities
during the second half of 1999 and the conversion of two additional agencies in
the second half of 2000.

     Purchased transportation decreased to 9.0% of operating revenues in 2000
from 12.5% in 1999. The Company reduced the miles driven by purchased
transportation, while increasing the miles driven by Company owned vehicles and
employee line drivers. As mentioned above, cost for wages, fuel, parts and
repairs related to the increased Company driven miles partially offset the
reduction in purchased transportation.

     Depreciation expense has been reduced to 6.7% of operating revenue in 2000
from 7.0% in 1999. While depreciation expense increased in buildings and
furnishings resulting from the completion of the new terminal facilities in
Phoenix and Reno, depreciation expense for revenue equipment was reduced by
improved utilization of tractors used both on the line during the night and in
pick-up and delivery service in the city during the day.

     Insurance and claims decreased to 2.6 % of operating revenues in 2000 from
3.1% in 1999. Claims expense for damaged freight was reduced by slightly less
than 0.5% of revenue in 2000 compared to 1999. Also, fewer accidents occurred
and claim settlement amounts were smaller during 2000 compared to 1999.
Frequency of accidents per million miles decreased to 4.8 during 2000 from 6.4
in 1999.

     Building rents increased to 2.6% of operating revenues in 2000 compared to
2.4% in 1999. This was due primarily to lease payments for additional facilities
in Fremont, California and Boise, Idaho, as well as continuing lease payments on
unused facilities in Chicago, Illinois, Benicia, California and Boise, Idaho for
the majority of the year. All leases on unused facilities expired prior to the
end of the year 2000.

     Total operating expense decreased to 92.6% of operating revenues for 2000,
compared to 93.9% for 1999.

     Net earnings increased 38% to 6.4 million for year 2000, compared to 4.7
million for 1999. Excluding unusual items, consisting primarily of a gain from
the sale of the Newark terminal facility, net earnings increased 26% to 5.9
million. Earnings per diluted share increased to $0.95 in 2000, compared to
$0.67 in 1999. Excluding unusual items, earnings per diluted share were $0.87
for 2000.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

     Operating revenues increased 9.2% in 1999 to $125.3 million from $114.7
million in 1998. The increase was attributable to the increased volume of
freight. The number of shipments during 1999 increased by 11.8% to 999,563,
compared to 893,957 for 1998. Revenue per hundredweight increased to $11.02 in
1999 from $10.92 for 1998.

     The Company's warehousing and distribution management company, MCDS,
contributed $4.1 million of the $125.3 million in operating revenues for the
year ended December 31, 1999 compared to $3.1 million for the year ended
December 31, 1998. This increase was due primarily to the expansion of a
contract with one customer and the addition of several smaller customers.

                                       13
<PAGE>

     Tonnage increased by 7.7% to 552,412 in 1999, compared to 512,705 in 1998.
Average revenue per bill decreased 2.8% to $121.82 in 1999 compared to $125.31
in 1998. Fourth quarter average revenue per bill increased to $127.87, however,
as a result of adjustments to pricing on freight that was not producing
sufficient yield.

     As a percentage of operating revenues, salaries, wages, and benefits
increased to 47.5% for the year ended December 31, 1999 from 45.1% for 1998.
Salaries and wage rates increased approximately 4% in 1999 compared to 1998. The
increase was due primarily to reduced yield in revenue as evidenced by the
reduction in average revenue per bill and increased staffing of full time
employees with their associated benefits. Additional line drivers were employed
allowing a reduction in the use of purchased transportation.

     Operating supplies and expenses, which include agent commissions, tires,
parts, repairs and fuel and other general operating expenses, increased in 1999
to 16.2% of operating revenue, compared to 13.9% for 1998. The increase was
primarily attributable to increased expenses, such as fuel, parts, tires and
repairs, associated with the shift from using purchased transportation to using
more Company trailers and drivers.

     Purchased transportation decreased to 12.5% of operating revenues in 1999
from 15.7% for 1998. The decrease was caused by the shifting of costs from
purchased transportation to other expense categories, such as payroll, operating
supplies and expense, operating taxes and licenses, and depreciation, associated
with having approximately 30 more line drivers during 1999 compared to 1998. The
Company has increased its staff employee drivers in order to provide more
reliable and consistent service.

     Interest expense was slightly less during 1999 compared to 1998. At
December 31, 1999, total long-term obligations were $8.1 million compared to
$5.5 million at December 31, 1998.

     Building rents increased to 2.4% of operating revenue for 1999 as compared
to 2.0% for 1998. This increase was due primarily to lease payments for
additional facilities in Fremont, California and Boise, Idaho as well as
continuing lease payments on unused facilities in Chicago, Illinois, Benicia,
California, and Boise, Idaho.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary sources of liquidity have been funds provided by
operations and bank borrowings. Net cash provided by operating activities was
approximately $12.6 million, $11.7 million and $15.3 million in 1998, 1999 and
2000, respectively. Net cash provided by operating activities is primarily
attributable to the Company's earnings before depreciation and amortization
expense.

     Capital expenditures net of disposed property totaled approximately $12.6
million, $16.0 million and $11.2 million during 1998, 1999 and 2000,
respectively. The majority of the Company's capital expenditures net of
disposition is financed with cash provided by operating activities and long-term
debt. The Company's budget for total capital expenditures net of disposed
property is approximately $12.5 million for 2001. These capital expenditures
will consist primarily of the construction and acquisition of terminal
facilities and the acquisition of revenue equipment.

     Net cash used in financing activities was $1.1 million in 1998 and $2.3
million was provided by financing activities in 1999. In 2000, net cash of $2.6
million was used by financing activities. At December 31, 2000, the Company had
outstanding long-term obligations (including current maturities) consisting of
approximately $8.1 million, most of which comprised obligations for purchase of
revenue equipment. See Note F to the Company's Consolidated Financial
Statements.

     The Company leases a small portion of the revenue equipment used in its
operations. At December 31, 2000, the Company's future minimum lease payments
under operating leases relating to equipment amounted to $8.4 million. See Note
D to the Company's Consolidated Financial Statements.

     The Company is a party to a loan agreement with Zions First National Bank
("Zions"). The loan agreement provides for a revolving line of credit in an
amount not exceeding $5 million. The loan agreement provides for the issuance of
letters of credit and may be used for this purpose, as well as to fund the
working capital needs of the Company. As of December 31, 2000, there was no
outstanding balance under this revolving line of credit.

                                       14
<PAGE>

     Zions has also provided a second revolving line of credit to the Company in
an amount not to exceed $20 million. The Company intends to use amounts
available under this credit facility, if necessary, primarily to purchase
equipment used in operations. As of December 31, 2000, the Company had $6.9
million in loans outstanding under this facility.

     All amounts outstanding under the two loan facilities described above
accrue interest at a variable rate established from time to time by Zions. The
Company does have the option, however, to request that specific advances accrue
interest at a fixed rate quoted by Zions, subject to certain prepayment
restrictions. All amounts outstanding under the two loan facilities are
collateralized by the Company's inventory, chattel paper, accounts receivable
and equipment now owned or hereafter acquired by the Company.

     In 1999, the Company announced a share repurchase program whereby the Board
of Directors of the Company authorized the repurchase of up to 700,000 shares.
As of December 31, 2000, a total of 511,500 shares had been repurchased by the
Company for approximately $2.9 million.

INFLATION

     Inflation has had a minimal effect upon the Company's profitability in
recent years. Most of the Company's operating expenses are inflation sensitive,
with inflation generally producing increased costs of operation. Although the
Company historically has been able to pass through most increases in fuel prices
and taxes to customers in the form of fuel surcharges or higher rates, the
Company generally must wait for larger carriers to implement fuel surcharges
before the Company can effectively implement fuel surcharges. Fuel prices
increased significantly during the third quarter of 1999. Accordingly, the
Company implemented a fuel surcharge in mid-August of 1999 to limit the impact
of fuel costs in future periods. The fuel surcharge remained in effect
throughout the year 2000. Although the fuel surcharge reduces the impact of
rising fuel costs, increased fuel prices can nevertheless have an adverse effect
on the operations and profitability of the Company due to the difficulty of
imposing and collecting the surcharge. See Item 1 "Business-Fuel Availability
and Cost." The Company expects that inflation will affect its costs no more than
it affects those of other regional LTL carriers.

SEASONALITY

     The Company experiences some seasonal fluctuations in freight volume.
Historically, the Company's shipments decrease during the winter months. In
addition, the Company's operating expenses historically have been higher in the
winter months due to decreased fuel efficiency and increased maintenance costs
for revenue equipment in colder weather. The Company's operating revenue and net
earnings may vary as a result of seasonal factors, and accordingly, results of
operations are subject to fluctuation, and results in any period should not be
considered indicative of the results to be expected for any future period.

CAUTIONARY STATEMENT FOR FORWARD LOOKING INFORMATION

     Certain information set forth in this Annual Report on Form 10-K contains
"forward-looking statements" within the meaning of federal securities laws.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events, future revenues or performance, capital
expenditures, financing needs, plans or intentions relating to acquisitions by
the Company and other information that is not historical information. When used
in this report, the words "estimates," "expects," "anticipates," "forecasts,"
"plans," "intends," "believes" and variations of such words or similar
expressions are intended to identify forward-looking statements. Additional
forward-looking statements may be made by the Company from time to time. All
such subsequent forward-looking statements, whether written or oral and whether
made by or on behalf of the Company, are also expressly qualified by these
cautionary statements.

     The Company's forward-looking statements are based upon the Company's
current expectations and various assumptions. The Company's expectations,
beliefs and projections are expressed in good faith and are believed by the
Company to have a reasonable basis, including without limitation, management's
examination of historical operating trends, data contained in the Company's
records and other data available from third parties, but there can

                                       15
<PAGE>

be no assurance that management's expectations, beliefs and projections will
result or be achieved or accomplished. The Company's forward-looking statements
apply only as of the date made. The Company undertakes no obligation to publicly
update or revise forward-looking statements which may be made to reflect events
or circumstances after the date made or to reflect the occurrence of
unanticipated events.

     There are a number of risks and uncertainties that could cause actual
results to differ materially from those set forth in, contemplated by or
underlying the forward-looking statements contained in this report. In addition
to the other factors and matters discussed elsewhere in this report, the
following factors are among the factors that could cause actual results to
differ materially from the forward-looking statements. Any forward-looking
statements made by or on behalf of the Company should be considered in light of
these factors.

ECONOMIC FACTORS AND FUEL PRICE FLUCTUATIONS

     The availability and price of fuel, insurance costs, interest rates,
fluctuations in customers' business cycles and national and regional economic
conditions are economic factors over which the Company has little or no control.
Significant increases in fuel prices, interest rates or increases in insurance
costs, to the extent not offset by increases in freight rates, or disruptions in
fuel supply, would adversely affect the Company's results of operations. A
significant downturn in customers' businesses, temporary inventory imbalances
(resulting from a recession or otherwise), or decreased demand for LTL carrier
services could also have a materially adverse effect on the Company.

AVAILABILITY OF EMPLOYEE DRIVERS AND INDEPENDENT CONTRACTORS

     The Company utilizes the services of both employee drivers and independent
contractors. Competition for employee drivers and independent contractors is
intense in the trucking industry, and the Company occasionally experiences
difficulty attracting or retaining enough qualified employee drivers and
independent contractors. There can be no assurance that the Company will not be
affected by a shortage of qualified employee drivers or independent contractors
in the future, which could result in temporary underutilization of revenue
equipment, difficulty in meeting shipper demands and increased compensation
levels. Prolonged difficulty in attracting or retaining qualified employee
drivers or independent contractors could have a materially adverse effect on the
Company's operations.

CAPITAL REQUIREMENTS

     The trucking industry is very capital intensive. If in the future the
Company were unable to borrow sufficient funds, enter into acceptable operating
lease arrangements, or raise additional equity, the resulting capital shortage
would impair the Company's ability to acquire additional revenue equipment and
adversely affect the Company's growth and profitability.

CLAIMS EXPOSURE AND INSURANCE COSTS

     Trucking companies, including the Company, face multiple claims for
personal injury and property damage relating to accidents, cargo damage and
workers' compensation. To the extent that the Company experiences a material
increase in the frequency or severity of accidents or workers' compensation
claims, or an unfavorable development on existing claims, the Company's
operating results and financial condition could be materially adversely
affected. Significant increases in the Company's claims and insurance costs, to
the extent not offset by rate increases, would reduce the Company's
profitability.

                                       16
<PAGE>

COMPETITION

     The trucking industry is highly competitive and fragmented. Competition for
freight transported by the Company is based primarily on service, efficiency and
on freight rates. The Company competes with regional, interregional and national
LTL carriers of varying sizes and, to a lesser extent with truckload carriers,
railroads and overnight delivery companies. Some of the Company's competitors
are divisions or subsidiaries of larger trucking companies. Many of the
Company's competitors have greater financial resources, more equipment and
greater freight capacity than the Company.

ENVIRONMENTAL HAZARDS

     The Company's operations are subject to various environmental laws and
regulations dealing with the transportation, storage, presence, use, disposal,
and handling of hazardous materials and hazardous wastes, discharge of
stormwater, and underground fuel storage tanks. The Company transports certain
commodities that are or may be deemed hazardous substances. The Company also
currently maintains above-ground and underground fuel storage tanks on several
of its properties. The Company is not aware of any fuel spills or hazardous
substance contamination on its properties that would have a material adverse
effect on the Company, and the Company believes that its operations are in
material compliance with existing environmental laws and regulations. If,
however, the Company should be involved in a fuel spill, or a spill or other
accident involving hazardous substances, if any such substances were found on
the Company's properties, or if the Company were found to be in violation of
applicable laws and regulations, the Company could be responsible for clean-up
costs, property damage, and fines or other penalties, any one of which could
have a materially adverse effect on the Company.

OTHER FACTORS

     In addition to the factors described above, the Company may be adversely
affected by a number of other matters and uncertainties, including: (i) changes
in demand for LTL carrier services; (ii) potential legislation and regulatory
changes; (iii) changes in competitive conditions in the Company's service
region; and (iv) increases in the cost of compliance with regulations, including
environmental regulations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company does not use financial instruments for trading purposes and is
not a party to any derivative financial instruments or derivative commodity
instruments. The Company is exposed to a variety of market risks, including the
effects of changes in interest rates and fuel prices. The Company's short-term
and long-term financing is generally at variable rates; however, these
obligations may be repaid or converted to a fixed rate at the Company's option.
For more information regarding the Company's debt obligations see Note F to the
Company's consolidated financial statements.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Financial statements and supplementary data required by this Item 8 are set
forth at the pages indicated in Item 14(a) below.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information to be included under the caption "Election of Directors" in
the Company's definitive proxy statement to be filed with the Commission
pursuant to Regulation 14A of the Exchange Act in connection with the 2001
Annual Meeting of Shareholders of the Company (the "Proxy Statement") is
incorporated herein by reference.

                                       17
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

     The information to be included under the caption "Executive Compensation"
in the Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information to be included under the caption "Present Beneficial
Ownership of Common Stock" in the Proxy Statement is incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information to be included under the caption "Executive
Compensation--Certain Relationships and Related Transactions" in the Proxy
Statement is incorporated herein by reference.


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS

<TABLE>
<S>                                                                             <C>
(a)(1)   Consolidated Financial Statements

         Report of Independent Certified Public Accountants                     F-1
         Consolidated Balance Sheets at December 31, 2000 and 1999              F-2

         Consolidated Statements of Earnings for the years ended
         December 31, 2000, 1999 and 1998                                       F-4

         Consolidated Statement of Stockholders' Equity for the
         years ended December 31, 2000, 1999 and 1998                           F-5

         Consolidated Statements of Cash Flows for the years
         ended December 31, 2000, 1999 and 1998                                 F-6

         Notes to Consolidated Financial Statements                             F-8
</TABLE>

(a)(2)   Schedules are omitted because they are not required or are not
         applicable or the required information is shown in the
         financial statements or notes thereto

(a)(3)   The following exhibits are filed herewith or incorporated by reference:

<TABLE>
<CAPTION>
Exhibit
Number         Exhibit
-------        -------
<S>       <C>
  3.1     Articles of Incorporation of the Company (filed as Exhibit 3.1 to the
          Company's Registration Statement on Form S-1 (File No. 333-37211) and
          incorporated herein by reference).

  3.2     Bylaws of the Company (filed as Exhibit 3.2 to the Company's
          Registration Statement on Form S-1 (File No. 333-37211) and
          incorporated herein by reference).

 10.1     Loan Agreement, dated November 25, 1998, between the Company, Motor
          Cargo and Zions First National Bank (filed as Exhibit 10.1 to the
          Company's Annual Report for 1998 on Form 10-K and incorporated herein
          by reference).
</TABLE>

                                       18
<PAGE>

<TABLE>
<S>       <C>
 10.2     $20,000,000 Promissory Note, dated September 22, 2000, to the order of
          Zions First National Bank.*

 10.3     $5,000,000 Promissory Note, dated September 22, 2000, to the order of
          Zions First National Bank.*

 10.4     1997 Stock Option Plan (filed as Exhibit 10.2 to the Company's
          Registration Statement on Form S-1 (File No. 333-37211) and
          incorporated herein by reference).(1)

 10.5     1999 Stock Option Plan for Non-Employee Directors (filed as Exhibit
          10.1 to the Company's Quarterly Report on Form 10-Q for the quarter
          ended March 31, 1999 and incorporated herein by reference).(1)

 10.6     Pension Plan of Employees of Motor Cargo and Trust Agreement (filed as
          Exhibit 10.3 to the Company's Registration Statement on Form S-1 (File
          No. 333-37211) and incorporated herein by reference).(1)

 10.7     Restricted Stock Agreement, dated October 2, 1997, between the Company
          and Louis V. Holdener (filed as Exhibit 10.5 to the Company's
          Registration Statement on Form S-1 (File No. 333-37211) and
          incorporated herein by reference).(1)

 10.8     Form of Salary Continuation Agreement (filed as Exhibit 10.12 to the
          Company's Registration Statement on Form S-1 (File No. 333-37211) and
          incorporated herein by reference).(1)

 10.9     Management Agreement between the Company and FHF Transportation, Inc.
          (filed as Exhibit 10.18 to the Company's Registration Statement on
          Form S-1 (file No. 333-37211 and incorporated herein by reference).

 10.10    Master Truck Agreement 2000-2003, between Motor Cargo, Reno, Nevada
          and Teamsters, Chauffeurs, Warehousemen & Helpers and Professional
          Clerical, Public and Miscellaneous Employees, Local Union No. 533,
          affiliated with the International Brotherhood of Teamsters.*

 10.11    Master Truck Agreement between Motor Cargo, Salt Lake City, Utah and
          the International Brotherhood of Teamsters, Chauffeurs, Warehousemen
          and Helpers of America, Local Union No. 222 (filed as Exhibit 10.16 to
          the Company's Annual Report for 1999 on Form 10-K and incorporated
          herein by reference).

 21       Subsidiaries of the Company (filed as Exhibit 21 to the Company's
          Registration Statement on Form S-1 (file No. 333-37211) and
          incorporated herein by reference).

 23       Consent of Grant Thornton LLP.*

</TABLE>

-------------------
(1)  Management contracts and compensatory plans and arrangements identified
     pursuant to Item 14(a)(3) of Form 10-K.

*    Filed with this report.

(b)  REPORTS ON FORM 8-K

     Not Applicable.

                                       19
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.


                                        MOTOR CARGO INDUSTRIES, INC.



Date: March 22, 2001               By /s/ Lynn H. Wheeler
                                      ----------------------------------
                                      Lynn H. Wheeler
                                      Vice President and Chief Financial Officer


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


Date: March 22, 2001                 By /s/ Harold R. Tate
                                        ----------------------------------
                                        Harold R. Tate, Director and
                                        Chairman of the Board


Date: March 22, 2001                 By /s/ Marshall R. Rate
                                        ----------------------------------
                                        Marshall L. Tate, Director
                                        (Principal Executive Officer)


Date: March 22, 2001                 By /s/ Lynn H. Wheeler
                                        ----------------------------------
                                        Lynn H. Wheeler, Chief Financial Officer
                                        (Principal Financial and Accounting
                                        Officer)


Date: March 22, 2001                 By /s/ Marvin L. Friedland
                                        ----------------------------------
                                        Marvin L. Friedland, Director


Date: March 22, 2001                 By /s/ Robert Anderson
                                        ----------------------------------
                                        Robert Anderson, Director


Date: March 22, 2001                 By /s/ James Clayburn La Force, Jr.
                                        ----------------------------------
                                        James Clayburn La Force, Jr., Director


                                       20
<PAGE>

                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors
Motor Cargo Industries, Inc. and Subsidiaries


We have audited the accompanying consolidated balance sheets of Motor Cargo
Industries, Inc. and Subsidiaries (the Company) as of December 31, 2000 and
1999, and the related consolidated statements of earnings, stockholders' equity
and cash flows for each of the three years in the period ended December 31,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Motor
Cargo Industries, Inc. and Subsidiaries as of December 31, 2000 and 1999, and
the consolidated results of their operations and their consolidated cash flows
for each of the three years in the period ended December 31, 2000, in conformity
with accounting principles generally accepted in the United States of America.


                                        /s/ Grant Thornton LLP

Salt Lake City, Utah
January 25, 2001

                                       F-1
<PAGE>

                  Motor Cargo Industries, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS

                                  December 31,

                                     ASSETS

<TABLE>
                                                               2000              1999
                                                           ------------      ------------
<S>                                                        <C>               <C>
CURRENT ASSETS
      Cash and cash equivalents (Note E)                   $  7,033,681      $  5,508,809
      Receivables (Notes B, E and L)                         18,124,930        16,570,062
      Prepaid expenses                                        2,112,198         2,720,084
      Supplies inventory (Note E)                               637,289           568,430
      Deferred income taxes (Note G)                          1,734,000         1,723,000
                                                           ------------      ------------
                  Total current assets                       29,642,098        27,090,385

PROPERTY AND EQUIPMENT, AT COST
    (Notes C, F and L)                                      106,185,662        99,459,949
      Less accumulated depreciation
         and amortization                                    51,851,119        46,644,471
                                                           ------------      ------------
                                                             54,334,543        52,815,478
Other assets
      Advances for purchase of real property (Note L)           787,695                --
      Other, net                                                600,552           664,321
                                                           ------------      ------------
                                                              1,388,247           664,321
                                                           ------------      ------------
                                                           $ 85,364,888      $ 80,570,184
                                                           ============      ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      F-2
<PAGE>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                       2000             1999
                                                                    -----------      -----------
<S>                                                                 <C>              <C>
CURRENT LIABILITIES
      Current maturities of long-term obligations (Note F)          $   119,152      $   109,151
      Accounts payable                                                2,854,290        3,361,660
      Accrued liabilities (Note N)                                    7,477,843        6,323,095
      Accrued claims (Note O)                                         1,440,438        1,727,391
      Income taxes payable                                              435,366          119,931
                                                                    -----------      -----------
                  Total current liabilities                          12,327,089       11,641,228

LONG-TERM OBLIGATIONS, less current
    maturities (Notes E and F)                                        8,015,125        8,020,523

DEFERRED INCOME TAXES (Note G)                                        7,522,000        7,267,000

COMMITMENTS AND CONTINGENCIES
    (Notes D, E, F, H, I, K, and L)                                          --               --

STOCKHOLDERS' EQUITY (Notes F, I and M)
      Preferred stock, no par value; Authorized -
         25,000,000 shares - none issued                                     --               --
      Common stock, no par value; Authorized -
         100,000,000 shares - issued and outstanding
         6,474,140 shares in 2000 and 6,925,040 shares in 1999        9,288,785       11,849,600
      Retained earnings                                              48,211,889       41,791,833
                                                                    -----------      -----------
                                                                     57,500,674       53,641,433
                                                                    -----------      -----------
                                                                    $85,364,888      $80,570,184
                                                                    ===========      ===========
</TABLE>

                                      F-3
<PAGE>

                  Motor Cargo Industries, Inc. and Subsidiaries

                       CONSOLIDATED STATEMENTS OF EARNINGS

                             Year ended December 31,

<TABLE>
<CAPTION>
                                                        2000                1999                1998
                                                    -------------       -------------       -------------
<S>                                                 <C>                 <C>                 <C>
Operating revenues                                  $ 131,111,694       $ 125,309,633       $ 114,724,798
                                                    -------------       -------------       -------------
Operating expenses
      Salaries, wages and benefits                     65,165,617          59,502,114          51,746,567
      Operating supplies and expenses                  21,811,961          20,341,773          15,973,557
      Purchased transportation                         11,870,030          15,580,049          17,975,515
      Operating taxes and licenses                      5,047,912           4,730,417           3,884,923
      Insurance and claims                              3,381,287           3,826,130           3,651,217
      Depreciation and amortization                     8,772,064           8,822,260           7,927,663
      Communications and utilities                      2,175,548           2,022,974           1,923,707
      Building and equipment rents                      3,423,529           3,043,136           2,365,006
      Gain on sale of equipment                          (206,060)           (241,084)           (103,110)
                                                    -------------       -------------       -------------
                  Total operating expenses            121,441,888         117,627,769         105,345,045
                                                    -------------       -------------       -------------
                  Operating income                      9,669,806           7,681,864           9,379,753
Other income (expense)
      Interest expense                                   (157,880)           (138,810)           (153,673)
      Other, net (Note L)                                 988,130             110,029             222,781
                                                    -------------       -------------       -------------
                                                          830,250             (28,781)             69,108
                                                    -------------       -------------       -------------
                  Earnings before income taxes         10,500,056           7,653,083           9,448,861
Income taxes (Note G)                                   4,080,000           3,000,000           3,660,000
                                                    -------------       -------------       -------------
                  Net earnings                      $   6,420,056       $   4,653,083       $   5,788,861
                                                    =============       =============       =============
Earnings per common share - basic                   $        0.95       $        0.67       $        0.83
                                                    =============       =============       =============
Weighted-average shares outstanding - basic             6,734,734           6,938,365           6,987,820
                                                    =============       =============       =============
Earnings per common share - diluted                 $        0.95       $        0.67       $        0.83
                                                    =============       =============       =============
Weighted-average shares outstanding - diluted           6,738,766           6,940,656           6,991,820
                                                    =============       =============       =============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      F-4
<PAGE>

                  Motor Cargo Industries, Inc. and Subsidiaries

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                  Years ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                             Preferred Stock             Common Stock
                                         ---------------------     -------------------------
                                           Number                   Number                          Retained
                                         of shares     Amount      of shares       Amount            earnings             Total
                                         ---------     -------     ---------    ------------       ------------       ------------
<S>                                      <C>           <C>         <C>          <C>                <C>
Balance, January 1, 1998                     --        $   --      6,990,000    $ 12,101,298       $ 31,349,889       $ 43,451,187

Vesting of 5,000 shares pursuant to
    Restricted Stock Agreement
    (Note M)                                 --            --             --          60,625                 --             60,625

Cashless repurchase of shares for
    income tax withholding (Note M)          --            --         (2,180)        (26,433)                --            (26,433)

Net earnings for the year                    --            --             --              --          5,788,861          5,788,861
                                           ----        ------     ----------    ------------       ------------       ------------
Balance, December 31, 1998                   --            --      6,987,820      12,135,490         37,138,750         49,274,240

Vesting of 5,000 shares pursuant to
    Restricted Stock Agreement
    (Note M)                                 --            --             --          40,000                 --             40,000

Cashless repurchase of shares for
    income tax withholding (Note M)          --            --         (2,180)        (17,440)                --            (17,440)

Repurchase of shares (Note M)                --            --        (60,600)       (308,450)                --           (308,450)

Net earnings for the year                    --            --             --              --          4,653,083          4,653,083
                                           ----        ------     ----------    ------------       ------------       ------------
Balance, December 31, 1999                   --            --      6,925,040      11,849,600         41,791,833         53,641,433

Vesting of 5,000 shares pursuant to
    Restricted Stock Agreement
    (Note M)                                 --            --             --          23,750                 --             23,750

Repurchase of shares (Note M)                --            --       (450,900)     (2,584,565)                --         (2,584,565)

Net earnings for the year                    --            --             --              --          6,420,056          6,420,056
                                           ----        ------     ----------    ------------       ------------       ------------
Balance, December 31, 2000                   --        $   --      6,474,140    $  9,288,785       $ 48,211,889       $ 57,500,674
                                           ====        ======     ==========    ============       ============       ============

</TABLE>

         The accompanying notes are an integral part of this statement.

                                      F-5
<PAGE>

                  Motor Cargo Industries, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             Year ended December 31,
<TABLE>
<CAPTION>
                                                                     2000               1999                1998
                                                                  ------------       ------------       ------------
<S>                                                               <C>                <C>                <C>
Increase (decrease) in cash and cash equivalents
      Cash flows from operating activities
           Net earnings                                           $  6,420,056       $  4,653,083       $  5,788,861
                                                                  ------------       ------------       ------------
           Adjustments to reconcile net earnings
               to net cash provided by operating activities
                  Depreciation and amortization                      8,772,064          8,822,260          7,927,663
                  Provision for losses on receivables                  314,000            282,100            217,500
                  Gain on disposition of property
                      and equipment                                 (1,345,307)          (241,084)          (103,110)
                  Amortization of unrecognized
                      pension obligation                                 5,790              5,790              5,790
                  Provision for claims                               2,150,171          2,635,771          4,703,340
                  Deferred income taxes                                244,000           (346,000)           942,000
                  Charge associated with stock
                      issuance to an officer                            23,750             40,000             60,625
                  Changes in assets and liabilities
                      Receivables                                     (365,301)        (2,669,188)        (1,228,754)
                      Prepaid expenses                                 607,886            (89,668)          (220,892)
                      Supplies inventory                               (68,859)          (108,719)            43,787
                      Other assets                                      52,100           (179,789)           (52,044)
                      Accounts payable                                (507,370)           403,289            939,194
                      Accrued liabilities and claims                (1,282,376)        (2,285,240)        (6,535,214)
                      Income taxes                                     315,435            742,579             60,385
                                                                  ------------       ------------       ------------
                             Total adjustments                       8,915,983          7,012,101          6,760,270
                                                                  ------------       ------------       ------------
                             Net cash provided by
                                 operating activities               15,336,039         11,665,184         12,549,131
                                                                  ------------       ------------       ------------
      Cash flows from investing activities
           Purchase of property and equipment                      (12,180,324)       (16,764,220)       (13,720,140)
           Proceeds from disposition of property
               and equipment                                         3,240,381            761,809          1,160,558
           Advances for purchase of real property                   (2,291,262)                --                 --
                                                                  ------------       ------------       ------------
                             Net cash used in
                                 investing activities              (11,231,205)       (16,002,411)       (12,559,582)
                                                                  ------------       ------------       ------------
</TABLE>

                                   (Continued)

                                      F-6
<PAGE>

                  Motor Cargo Industries, Inc. and Subsidiaries

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                             Year ended December 31,

<TABLE>
<CAPTION>
                                                                     2000               1999                1998
                                                                  ------------       ------------       ------------
<S>                                                               <C>                <C>                <C>
Cash flows from financing activities
      Repurchase of common stock                                    (2,584,565)          (308,450)                --
      Proceeds from issuance of long-term
         obligations                                                   113,755          2,742,822                 --
      Principal payments on long-term
         obligations                                                  (109,152)          (102,990)        (1,091,597)
                                                                  ------------       ------------       ------------
                             Net cash provided by (used in)
                                 financing activities               (2,579,962)         2,331,382         (1,091,597)
                                                                  ------------       ------------       ------------
                             Net increase (decrease) in cash
                                 and cash equivalents                1,524,872         (2,005,845)        (1,102,048)

Cash and cash equivalents at beginning of year                       5,508,809          7,514,654          8,616,702
                                                                  ------------       ------------       ------------
Cash and cash equivalents at end of year                          $  7,033,681       $  5,508,809       $  7,514,654
                                                                  ============       ============       ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during the year for
      Interest                                                    $    158,677       $    137,953       $    154,751
      Income taxes                                                   3,425,000          2,593,128          2,537,933

</TABLE>

NONCASH INVESTING AND FINANCING ACTIVITIES

During 2000, in connection with the 5,000 shares issued per the restricted stock
agreement, the Company recognized compensation expense of $23,750.

During 1999, in connection with the 5,000 shares issued per the restricted stock
agreement, the Company recognized compensation expense of $40,000 and redeemed
2,180 shares valued at $17,440 as tax withholdings.

During 1998, in connection with the 5,000 shares issued per the restricted stock
agreement, the Company recognized compensation expense of $60,625 and redeemed
2,180 shares valued at $26,433 as tax withholdings.

        The accompanying notes are an integral part of these statements.

                                      F-7
<PAGE>

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A summary of significant accounting policies consistently applied in the
     preparation of the accompanying consolidated financial statements follows.

     1.   BUSINESS ACTIVITY

     The Company is a regional less-than-truckload carrier that provides
     transportation and logistics services to shippers within its core service
     region.

     2.   PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of Motor Cargo
     Industries, Inc. (MCI) and its wholly-owned subsidiary, Motor Cargo and its
     wholly-owned subsidiaries, MC Leasing, Inc., MC Distribution Services, Inc.
     and ICC, Inc. All significant intercompany accounts and transactions have
     been eliminated in consolidation.

     3.   FINANCIAL STATEMENT PRESENTATION

     In preparing the Company's financial statements, in accordance with
     accounting principles generally accepted in the United States, management
     is required to make estimates and assumptions that affect the reported
     amounts of assets and liabilities, the disclosure of contingent assets and
     liabilities at the date of the financial statements, and the reported
     amounts of revenues and expenses during the reporting period. Actual
     results could differ significantly from those estimates. Significant
     estimates include accrued claims and allowance for doubtful accounts.

     4.   CASH EQUIVALENTS

     The Company considers all highly liquid debt instruments with a maturity of
     three months or less when purchased to be cash equivalents.

     5.   SUPPLIES INVENTORY

     Supplies inventory consists primarily of fuel and equipment parts and is
     stated at the lower of cost (first-in, first-out method) or market.

                                      F-8
<PAGE>

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     6.   DEPRECIATION AND AMORTIZATION

     Depreciation of property and equipment is provided on the straight-line
     method over the estimated useful lives of the assets. Accelerated methods
     of depreciation of property and equipment are used for income tax purposes.

     Leasehold improvements are amortized over the lesser of the useful life of
     the asset or term of the lease.

     Maintenance, repairs, and renewals which neither materially add to the
     value of the property nor appreciably prolong its life are charged to
     expense as incurred. Gains or losses on dispositions of property and
     equipment are included in earnings.

     7.   INCOME TAXES

     The Company utilizes the liability method of accounting for income taxes.
     Under the liability method, deferred income tax assets and liabilities are
     provided based on the difference between the financial statement and tax
     bases of assets and liabilities as measured by the currently enacted tax
     rates in effect for the years in which these differences are expected to
     reverse. Deferred tax expense or benefit is the result of changes in
     deferred tax assets and liabilities.

     8.   INSURANCE COVERAGE AND ACCRUED CLAIMS

     The Company is self-insured for health costs, cargo damage claims, and
     automobile and general liability claims up to $70,000, $100,000 and
     $250,000, respectively, per single occurrence. The Company also maintains
     workers' compensation insurance, with no deductible except for the state of
     Nevada, which deductible is $250,000 per occurrence.

     The Company estimates and accrues a liability for its share of final
     settlements using all available information including the services of a
     third-party insurance risk claims administrator to assist in establishing
     reserve levels for each occurrence based on the facts and circumstances of
     the incident coupled with the Company's history of such claims. The Company
     accrues for workers' compensation and automobile liabilities when reported,
     usually the same day as the occurrence. Additionally, the Company accrues
     an estimated liability for incurred but not reported claims. Expense
     depends upon actual loss experience and changes in estimates of settlement
     amounts for open claims which have not been fully resolved. The Company
     provides for adverse loss developments in the period when new information
     becomes available.

                                      F-9
<PAGE>

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     9.   REVENUE RECOGNITION

     Freight charges are generally recognized as revenue in the period when the
     shipment is complete or the services are rendered. Revenue from in-transit
     freight is recognized on a percentage-of-completion basis, based on the
     average transit time for that period. Expenses associated with the
     operating revenue are recognized when incurred.

     10.  PREPAID TIRES

     The Company capitalizes tires purchased with new equipment and depreciates
     them over the estimated useful life of the equipment (5-10 years).
     Replacement tires are expensed upon placement into service.

     11.  EARNINGS PER SHARE

     The Company follows the provisions of Statement of Financial Accounting
     Standards No. 128 "Earnings Per Share" (SFAS No. 128). SFAS No. 128
     requires the presentation of basic and diluted EPS. Basic EPS are
     calculated by dividing earnings available to common shareholders by the
     weighted-average number of common shares outstanding during each period.
     Diluted EPS are similarly calculated, except that the weighted-average
     number of common shares outstanding includes common shares that may be
     issued subject to existing rights with dilutive potential.

     12.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The fair value of the Company's cash and cash equivalents, receivables,
     accounts payable and accrued liabilities approximate carrying value due to
     the short-term maturity of the instruments. The fair value of long-term
     obligations approximate carrying value based on their effective interest
     rates compared to current market prices.

     13.  CERTAIN RECLASSIFICATIONS

     Certain nonmaterial reclassifications have been made to the 1999 and 1998
     financial statements to conform to the 2000 presentation.

                                      F-10
<PAGE>

NOTE B - RECEIVABLES

     Receivables consist of the following:

<TABLE>
<CAPTION>
                                                              2000               1999
                                                          ------------       ------------
<S>                                                       <C>                <C>
     Trade receivables                                    $ 16,441,275       $ 17,004,970
     Advances for purchase of real property (Note L)         1,503,567                 --
     Other receivables                                         719,791            210,707
                                                          ------------       ------------
                                                            18,664,633         17,215,677
     Allowance for doubtful accounts                          (539,703)          (645,615)
                                                          ------------       ------------
                                                          $ 18,124,930       $ 16,570,062
                                                          ============       ============
</TABLE>

     The history of the allowance for doubtful accounts is as follows:

<TABLE>
<CAPTION>
                                       2000            1999            1998
                                     ---------       ---------       ---------
<S>                                  <C>             <C>             <C>
     Balance, beginning of year      $ 645,615       $ 641,264       $ 572,801
     Provisions for losses             314,000         282,100         217,500
     Write-offs, net                  (419,912)       (277,749)       (149,037)
                                     ---------       ---------       ---------
     Balance, end of year            $ 539,703       $ 645,615       $ 641,264
                                     =========       =========       =========
</TABLE>

NOTE C - PROPERTY AND EQUIPMENT

     Cost of property and equipment and estimated useful lives are as follows:

<TABLE>
<CAPTION>
                                                2000              1999             Years
                                            ------------      ------------      -------------
<S>                                         <C>               <C>               <C>
     Land                                   $  6,430,385      $  7,130,385           --
     Buildings                                17,599,772        18,492,100         20-45
     Revenue equipment                        57,549,237        56,850,948          5-10
     Service cars and equipment                  727,155           697,909          3-10
     Shop and garage equipment                   282,030           264,075          3-10
     Office furniture and fixtures             2,831,581         2,670,329          3-10
     Other property and equipment             10,731,472         9,904,137          3-10
     Leasehold improvements                    4,088,859         3,450,066      Life of lease
     Construction in progress (Note L)         5,945,171                --           --
                                            ------------      ------------
                                            $106,185,662      $ 99,459,949
                                            ============      ============
</TABLE>

                                      F-11
<PAGE>

NOTE D - LEASES

     The Company leases buildings and revenue equipment under operating lease
     agreements. The following is a schedule of future minimum lease payments
     under operating leases at December 31, 2000:

<TABLE>
<CAPTION>
                                                                                Total
     Year ending December 31,                Buildings        Equipment         leases
     ------------------------               -----------      -----------      -----------
<S>                                         <C>              <C>              <C>
        2001                                $ 1,867,800      $ 1,663,958      $ 3,531,758
        2002                                  1,198,525        1,470,307        2,668,832
        2003                                  1,076,972        1,450,420        2,527,392
        2004                                  1,013,926        1,154,301        2,168,227
        2005                                    955,615        1,137,271        2,092,886
        Thereafter                            5,624,692        1,533,516        7,158,208
                                            -----------      -----------      -----------
           Total minimum lease payments     $11,737,530      $ 8,409,773      $20,147,303
                                            ===========      ===========      ===========
</TABLE>

     The leases generally provide that property taxes, insurance, and
     maintenance expenses are obligations of the Company. It is expected that in
     the normal course of business, operating leases that expire will be renewed
     or replaced by leases on other properties or equipment. The total rent
     expense for the years ended December 31, 2000, 1999, and 1998, was
     approximately $4,270,000, $3,043,000 and $2,365,000, respectively.

NOTE E - REVOLVING BANK LOAN

     The Company has a revolving bank loan. Under the loan agreement, borrowings
     are limited to the lesser of 70 percent of allowable trade receivables, or
     $5,000,000. Any outstanding amounts accrue interest at .25 percentage
     points below the lending institution's prime rate, and are payable monthly.
     No principal payments are required until maturity (April 2002) as long as
     the loan does not exceed the required limits. The agreement is
     collateralized by cash and cash equivalents, receivables, supplies
     inventory, and all documents, instruments, and chattel paper now owned or
     hereafter acquired by the Company. At December 31, 2000 and 1999, there
     were no draws against the loan.

     The Company has an additional line of credit with a limit of $20,000,000 as
     of December 31, 2000 and 1999. This line is collateralized by revenue
     equipment. As of December 31, 2000 and 1999, there was $6,853,577 and
     $6,739,822, respectively, drawn against the line (Note F).

                                      F-12
<PAGE>

NOTE F - LONG-TERM OBLIGATIONS

     Long-term obligations consist of the following:

<TABLE>
<CAPTION>
                                                                                        2000                1999
                                                                                     -----------         -----------
<S>                                                                                  <C>                 <C>
     Prime less .25% (9.5% at December 31, 2000) note payable on a revolving
       loan (up to $20,000,000) to a bank, due in 2002, interest payments due
       monthly and unpaid balance of principal due in 2002, collateralized by
       revenue equipment (Note E)                                                    $ 6,853,577         $ 6,739,822

     8.75-8.85% notes payable to a corporation, due in 2003, payable in monthly
       installments of $18,964, including interest, balloon payment of $971,258
       due at maturity, collateralized by land and buildings                           1,280,700           1,389,852
                                                                                     -----------         -----------
                                                                                       8,134,277           8,129,674
     Less current maturities                                                             119,152             109,151
                                                                                     -----------         -----------
                                                                                     $ 8,015,125         $ 8,020,523
                                                                                     ===========         ===========
</TABLE>

     Maturities of long-term obligations at December 31, 2000 are as follows:

<TABLE>
<CAPTION>
          Year ending December 31,
          ------------------------
<S>                                               <C>
               2001                               $   119,152
               2002                                 6,983,647
               2003                                 1,031,478
               Thereafter                                  --
                                                  -----------
                                                  $ 8,134,277
                                                  ===========
</TABLE>

     The revolving bank loan agreements contain various restrictive covenants
     including provisions relating to the maintenance of net worth, earnings to
     debt ratio, and liability insurance coverage. As of December 31, 2000, the
     Company was in compliance with all covenants under the revolving bank loan
     agreements.

                                      F-13
<PAGE>

NOTE G - INCOME TAXES

     Income tax expense consists of the following:

<TABLE>
<CAPTION>
                           2000              1999              1998
                        -----------       -----------       -----------
<S>                     <C>               <C>               <C>
     Current
           Federal      $ 3,203,871       $ 2,825,541       $ 2,280,862
           State            632,129           520,459           437,138
                        -----------       -----------       -----------
                          3,836,000         3,346,000         2,718,000
                        -----------       -----------       -----------
     Deferred
           Federal          202,856          (287,744)          781,860
           State             41,144           (58,256)          160,140
                        -----------       -----------       -----------
                            244,000          (346,000)          942,000
                        -----------       -----------       -----------
                        $ 4,080,000       $ 3,000,000       $ 3,660,000
                        ===========       ===========       ===========
</TABLE>

     The income tax provision reconciled to the tax computed at the federal
     statutory rate of 34 percent is as follows:

<TABLE>
<CAPTION>
                                                            2000            1999            1998
                                                         ----------      ----------      ----------
<S>                                                      <C>             <C>             <C>
     Federal income taxes at statutory rate              $3,570,000      $2,602,000      $3,212,000
     State income taxes, net of federal tax benefit         452,000         332,000         392,000
     All other                                               58,000          66,000          56,000
                                                         ----------      ----------      ----------
                                                         $4,080,000      $3,000,000      $3,660,000
                                                         ==========      ==========      ==========
</TABLE>

     Deferred tax assets and liabilities consist of the following:

<TABLE>
<CAPTION>
                                                   2000            1999
                                                ----------      ----------
<S>                                             <C>             <C>
     Current deferred tax assets
           Allowance for doubtful accounts      $  206,000      $  247,000
           Vacation accrual                        640,000         572,000
           Accrued claims                          582,000         609,000
           Deferred revenue                        306,000         295,000
                                                ----------      ----------
     Net current deferred tax assets            $1,734,000      $1,723,000
                                                ==========      ==========
</TABLE>

                                      F-14
<PAGE>

NOTE G - INCOME TAXES - CONTINUED

<TABLE>
<CAPTION>
                                                         2000              1999
                                                      -----------       -----------
<S>                                                   <C>               <C>
     Long-term deferred tax assets (liabilities)
           Unfunded pension                           $        --       $   (35,000)
           Accrued compensation                           203,000           111,000
           Equipment temporary differences             (7,725,000)       (7,343,000)
                                                      -----------       -----------
     Net long-term deferred tax liability             $(7,522,000)      $(7,267,000)
                                                      ===========       ===========
</TABLE>

     The Company's deferred tax assets result from temporary timing differences
     between financial and tax reporting standards. For accrued expenses, the
     deferred tax assets are expected to reverse in the period the Company pays
     the expenses. For the allowance for doubtful accounts, the deferred tax
     asset reverses when the accounts are written off. Finally, the deferred tax
     asset for deferred revenue reverses when the Company recognizes the revenue
     for financial reporting purposes. Considering the Company's history of
     positive earnings, no valuation allowance against the deferred tax assets
     is considered necessary.

NOTE H - EMPLOYEE BENEFIT PLANS

     1.   PENSION PLAN

     The Company participates in a defined benefit pension plan covering
     substantially all of its employees. The benefits are based on years of
     service and hours of service in the current year. A participant is fully
     vested after five years. Contributions are intended to provide not only for
     benefits attributed to service to date, but also for those expected
     benefits to be earned in the future. Information pertaining to the activity
     in the plan is as follows:

<TABLE>
<CAPTION>
                                                                              Pension Benefits
                                                               ------------------------------------------------
                                                                  2000               1999                1998
                                                               -----------        -----------        -----------
<S>                                                            <C>                <C>                <C>
     Change in benefit obligation
           Benefit obligation at beginning of year             $ 5,689,892        $ 5,449,623        $ 4,413,501
           Service cost                                            321,147            407,540            268,884
           Interest cost                                           419,407            348,756            346,433
           Actuarial loss (gain)                                  (366,697)          (347,746)           586,993
           Benefits paid                                          (195,598)          (168,281)          (166,188)
                                                               -----------        -----------        -----------
           Benefit obligation at end of year                   $ 5,868,151        $ 5,689,892        $ 5,449,623
                                                               ===========        ===========        ===========
</TABLE>

                                      F-15
<PAGE>

NOTE H - EMPLOYEE BENEFIT PLANS - CONTINUED

<TABLE>
<CAPTION>
                                                                              Pension Benefits
                                                               ------------------------------------------------
                                                                  2000               1999                1998
                                                               -----------        -----------        -----------
<S>                                                            <C>                <C>                <C>
     Change in plan assets
           Fair value of plan assets at beginning of year      $ 6,236,581        $ 5,328,226        $ 4,929,225
           Actual return on plan assets                           (337,970)           837,636            440,189
           Employer contribution                                   328,000            239,000            125,000
           Benefits paid                                          (195,598)          (168,281)          (166,188)
                                                               -----------        -----------        -----------
           Fair value of plan assets at end of year            $ 6,031,013        $ 6,236,581        $ 5,328,226
                                                               ===========        ===========        ===========
     Funded status
           Plan assets over (under) benefit obligation         $   162,862        $   546,669        $  (121,397)
           Unrecognized net actuarial gain                        (393,798)          (950,210)          (206,611)
           Unrecognized net transition amount                       52,281             58,071             63,861
                                                               -----------        -----------        -----------
           Accrued pension cost                                $  (178,655)       $  (345,470)       $  (264,147)
                                                               ===========        ===========        ===========

</TABLE>

     The components of net periodic pension cost are as follows:

<TABLE>
<S>                                                            <C>                <C>                <C>
           Service cost                                        $   321,147        $   407,540        $   268,884
           Interest cost                                           419,407            348,756            346,433
           Expected return on plan assets                         (585,159)          (441,763)          (440,189)
           Amortization of prior service cost                        5,790              5,790              4,588
                                                               -----------        -----------        -----------
           Net periodic pension cost                           $   161,185        $   320,323        $   179,716
                                                               ===========        ===========        ===========

     Weighted-average assumptions as of December 31,
           Discount rate                                              7.50%              7.50%              6.50%
           Expected return on plan assets                             8.00               8.00               6.50
           Rate of compensation increase                                --                 --                 --
</TABLE>


                                      F-16
<PAGE>

NOTE H - EMPLOYEE BENEFIT PLANS - CONTINUED

     2.   401(k) PROFIT-SHARING PLAN

     The Company has a qualified 401(k) profit-sharing plan (the Plan) for its
     employees. All employees who have completed one year of service with the
     Company are eligible to participate in the Plan. Under the Plan, employees
     are allowed to make contributions of between 1 percent and 15 percent of
     their annual compensation. The Company matches certain percentages of
     employee contributions up to 6 percent of the employee's annual
     compensation, depending on the Company's operating ratio. All amounts
     contributed by a participant are fully vested at all times. A participant
     becomes vested over time and is fully vested in any Company matching
     contributions after 7 years of service. Expenses for Company contributions
     approximated $495,000, $421,000 and $475,000, for the years ended December
     31, 2000, 1999 and 1998, respectively.

NOTE I - STOCK OPTIONS

     In January of 1999, the Company's Board of Directors and stockholders
     adopted the Motor Cargo Industries, Inc. 1999 Stock Option Plan for
     non-employee Directors (the 1999 Option Plan). The Company reserved 100,000
     shares of common stock under the 1999 Option Plan. Accordingly, the Board
     of Directors has approved the granting of options under the Option Plan as
     follows:

     Non-employee Directors have been granted options to acquire 35,000 shares
     of common stock. The options were granted at $7.50 per share, which was the
     market price of the Company's common shares on the day of grant. The
     options vest periodically through January 2003 and expire in 2010.

     In October 1997, the Company's Board of Directors and stockholders adopted
     the Motor Cargo Industries, Inc. 1997 Stock Option Plan (the 1997 Option
     Plan). The Company reserved 500,000 shares of common stock under the 1997
     Option Plan. Accordingly, the Board of Directors has approved the granting
     of options under the Option Plan as follows:

     Directors, officers and key employees have been granted options to acquire
     365,000 shares of common stock. The options were originally granted at
     $12.00 to $12.50 per share, which was the market price of the Company's
     common shares on the date granted. The options vest periodically through
     January of 2003. The options expire upon the earlier of an expiration date
     fixed by the committee responsible for the administering of the Plan or 10
     years from the date of the grant.

                                      F-17
<PAGE>

NOTE I - STOCK OPTIONS - CONTINUED

     During 1999, all original stock option agreements under the 1997 Option
     Plan were canceled and new options were granted at an exercise price of
     $7.50 per share, which was the market price of the Company's common stock
     on the date reissued. Because of the immediate reissuance of the new
     options at a reduced exercise price, the reissued options are accounted for
     as variable stock options under APB Opinion No. 25. Variable stock options
     require compensation cost to be adjusted at the end of each reporting
     period based on the change in the intrinsic value of the variable stock
     options. As of December 31, 2000, no adjustment to compensation cost is
     necessary.

     During 2000, the Company granted an additional 41,300 options under the
     1997 Option Plan. These options were granted at an exercise price of $4.69,
     which was the market price of the Company's common shares on the date
     granted. The options vest periodically through February of 2004. The
     options expire upon the earlier of an expiration date fixed by the
     committee responsible for administering the Plan or 10 years from the date
     of the grant.

     Changes to the Company's stock options are as follows:

<TABLE>
<CAPTION>
                                                        Exercise price     Weighted-average
                                     Stock options        per share         exercise price
                                     -------------     ---------------     ----------------
<S>                                  <C>               <C>                 <C>
     Outstanding at
        January 1, 1998                 249,500        $         12.00          $12.00
           Granted                       42,000                  12.50           12.50
           Exercised                         --                     --              --
           Canceled/expired                  --                     --              --
                                      ---------
     Outstanding at
        December 31, 1998               291,500         12.00 to 12.50           12.07
           Granted                      400,000                   7.50            7.50
           Exercised                         --                     --              --
           Canceled/expired            (291,500)        12.00 to 12.50           12.07
                                      ---------
     Outstanding at
        December 31, 1999               400,000                   7.50            7.50
           Granted                       41,300                   4.69            4.69
           Exercised                         --                     --              --
           Canceled/expired             (85,000)          4.69 to 7.50            7.37
                                      ---------
     Outstanding at
        December 31, 2000               356,300        $ 4.69 to 7.50           $ 7.21
                                      =========        ==============           ======
     Exercisable at
        December 31, 2000                79,750        $         7.50           $ 7.50
                                      =========        ==============           ======

</TABLE>

     No stock options were exercisable at December 31, 1999. 62,375 stock
     options were exercisable at $12.00 per share at December 31, 1998.

                                      F-18
<PAGE>

NOTE I - STOCK OPTIONS - CONTINUED

     Additional information about stock options outstanding and exercisable at
     December 31, 2000 is as follows:

     OPTIONS OUTSTANDING

<TABLE>
<CAPTION>
                                                                         Weighted-average
                           Number            Weighted-average         remaining contractual
     Exercise price      outstanding          exercise price               life (years)
     --------------      -----------         ---------------          ---------------------
<S>                      <C>                 <C>                      <C>
         $4.69              41,300               $ 4.69                        9.1
         $7.50             315,000               $ 7.50                        8.1
                           -------
                           356,300
                           =======
</TABLE>

     OPTIONS EXERCISABLE

<TABLE>
                           Number            Weighted-average
     Exercise price      exercisable          exercise price
     --------------      -----------         ----------------
<S>                      <C>                 <C>
         $7.50             79,750                 $ 7.50
</TABLE>

     FAIR MARKET VALUE OF OPTIONS GRANTED

     The Company has adopted only the disclosure provisions of Financial
     Accounting Standard No. 123, "Accounting for Stock-Based Compensation"
     (FAS 123). Therefore, the Company accounts for stock based compensation
     under Accounting Principles Board Opinion No. 25, under which no
     significant compensation cost has been recognized. Had the compensation
     cost for the stock based compensation been determined based upon the fair
     value of the options at the grant date consistent with the methodology
     prescribed by FAS 123, the Company's net earnings and earnings per share
     would have been reduced to the following pro forma amounts:

<TABLE>
<CAPTION>
                                                      2000             1999             1998
                                                  -----------      -----------      -----------
<S>                                               <C>              <C>              <C>
     Net earnings
           As reported                            $ 6,420,056      $ 4,653,083      $ 5,788,861
           Pro forma                                6,122,235        4,326,056        5,337,141
     Net earnings per common share - basic
           Net earnings                           $      0.95      $      0.67      $      0.83
           Pro forma                                     0.91             0.62             0.76

     Net earnings per common share - diluted
           Net earnings                           $      0.95      $      0.67      $      0.83
           Pro forma                                     0.91             0.62             0.76
</TABLE>

                                      F-19
<PAGE>

NOTE I - STOCK OPTIONS - CONTINUED

     FAIR MARKET VALUE OF OPTIONS GRANTED - CONTINUED

     The fair value of these options was estimated at the date of grant using
     the Black-Scholes American option-pricing model with the following
     weighted-average assumptions for 2000, 1999 and 1998, respectively:
     expected volatility of 78, 79 and 67 percent; risk-free interest rate of
     6.68, 5.03 and 5.65 percent; and expected life of 7.5 for each of the three
     years. The weighted-average fair value of options granted was $3.65, $5.79
     and $8.90 in 2000, 1999 and 1998, respectively.

     Option pricing models require the input of highly sensitive assumptions,
     including the expected stock price volatility. Also, the Company's stock
     options have characteristics significantly different from those of traded
     options, and changes in the subjective input assumptions can materially
     affect the fair value estimate. Management believes the best input
     assumptions available were used to value the options and that the resulting
     option values are reasonable.

NOTE J - EARNINGS PER COMMON SHARE

<TABLE>
<CAPTION>
                                                        2000             1999             1998
                                                     ----------       ----------       ----------
<S>                                                  <C>              <C>              <C>
     Common shares outstanding at
        beginning of period                           6,925,040        6,987,820        6,990,000

     Weighted average common shares issued
        during the period                                    --               --               --

    Weighted average common shares repurchased
        during the period                              (190,306)         (49,455)          (2,180)
                                                     ----------       ----------       ----------
     Weighted average number of common
         shares used in basic EPS                     6,734,734        6,938,365        6,987,820

     Dilutive effect of stock options                     4,032            2,291            4,000
                                                     ----------       ----------       ----------
     Weighted average number of common
         shares and dilutive potential common
         stock used in diluted EPS                    6,738,766        6,940,656        6,991,820
                                                     ==========       ==========       ==========

</TABLE>


                                      F-20
<PAGE>

NOTE K - DEFERRED COMPENSATION

     The Company has salary continuation agreements with certain key management
     employees. Under the agreements, the Company is obligated to provide for
     each such employee or his beneficiaries, during a period of not more than
     ten years after the employee's death, disability, or retirement, annual
     benefits ranging from $17,000 to $23,000. The Company has purchased
     universal life insurance policies on the lives of these participants. These
     insurance policies, which remain the sole property of the Company, are
     payable to the Company upon the death of the participant or maturity of the
     insurance policy.

     The Company separately contracts with the participants to pay stated
     benefits substantially equivalent to those received or available under the
     insurance policies upon retirement, death, or permanent disability. The
     expense incurred for the years ended December 31, 2000, 1999 and 1998, was
     approximately $64,000, $58,000 and $54,000, respectively.


NOTE L - COMMITMENTS AND CONTINGENCIES

     1.   PURCHASE OF PROPERTY AND EQUIPMENT

     During 2000, the Company made advances toward the purchase of property and
     the construction of a new terminal in Denver, Colorado. In December 2000,
     the Company sold a vacant terminal in Newark, California, resulting in a
     gain of $1,139,247, which is included in other income. To facilitate an
     income tax-deferred exchange relating to these two terminals, the Company
     placed the proceeds from the sale of the Newark, California terminal in an
     escrow account until the completion of construction of the Denver terminal.

     At December 31, 2000, the Company included $4,285,650 incurred on the
     construction of the Denver terminal in construction in progress. Funds
     remaining in escrow at December 31, 2000 total $2,291,262. Of these funds,
     $787,695 is committed under the construction contract and is included in
     other assets. The remaining $1,503,567 in escrow represents advanced costs
     in excess of the amounts committed under the construction contract that
     will be returned to the Company and is included in receivables.

     At December 31, 2000, the Company has outstanding purchase orders for
     revenue equipment totaling approximately $6,143,000.

                                      F-21
<PAGE>

NOTE L - COMMITMENTS AND CONTINGENCIES - CONTINUED

     2.   LETTERS OF CREDIT

     At December 31, 2000, the Company had outstanding letters of credit
     totaling $1,430,000 ($1,280,000 at December 31, 1999). There were no draws
     against these letters of credit during any of the periods presented.

     3.   LITIGATION

     The Company is involved in litigation arising in the normal course of
     business. It is not possible to state the ultimate liability, if any, in
     these matters. In the opinion of management, such litigation will have no
     material effect on the financial position and results of operations of the
     Company, in excess of amounts accrued.

NOTE M - CAPITAL TRANSACTIONS

     In October 1997, the Company's Board of Directors awarded an officer of the
     Company 20,000 shares of the Company's common stock. The award was made
     pursuant to a Restricted Stock Agreement which states that 20,000 shares of
     the Company's common stock will be issued in the officer's name. The
     Company will hold the certificates for the shares, which will be released
     in four installments, each consisting of 25 percent of the shares issued
     based on the officer's continued employment. In the event the officer
     voluntarily ceases his employment with the Company or the Company
     terminates his employment for cause, the shares not previously released
     will be forfeited. Termination of employment by the Company without cause,
     or termination due to disability or death will result in the prompt release
     of some or all shares not previously released, depending upon the date of
     the relevant event. During 2000, 1999 and 1998, 5,000 shares vested
     annually, resulting in compensation expense in the amount of $23,750,
     $40,000 and $60,625, respectively. Of the 5,000 shares vested during 1999,
     2,180 shares were simultaneously redeemed by the Company. The remaining
     2,820 shares were released to the officer's name. All of the 5,000 shares
     vested during 2000 were released to the officer's name.

     During the first quarter of 1999, the Company announced a share repurchase
     program. The Board of Directors of the Company authorized the repurchase of
     up to 700,000 shares of outstanding common stock. As of December 31, 2000,
     a total of 511,500 shares had been repurchased by the Company for
     approximately $2,893,000.

NOTE N - ACCRUED LIABILITIES

     Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                2000            1999
                                             ----------      ----------
<S>                                          <C>             <C>
     Salaries, wages, and payroll taxes      $3,361,440      $2,611,473
     Accrued employee benefits                1,471,197       1,353,340
     Vacation accrual                         1,671,317       1,498,511
     All other                                  973,889         859,771
                                             ----------      ----------
                                             $7,477,843      $6,323,095
                                             ==========      ==========
</TABLE>

                                      F-22
<PAGE>

NOTE O - ACCRUED CLAIMS

     The history of accrued claims is as follows:

<TABLE>
<CAPTION>
                                          2000              1999              1998
                                       -----------       -----------       -----------
<S>                                    <C>               <C>               <C>
     Balance at beginning of year      $ 1,727,391       $ 1,382,085       $ 2,956,911
     Provision                           2,150,171         2,635,711         4,703,340
     Claims                             (2,437,124)       (2,290,405)       (6,278,166)
                                       -----------       -----------       -----------
     Balance at end of year            $ 1,440,438       $ 1,727,391       $ 1,382,085
                                       ===========       ===========       ===========

</TABLE>

NOTE P - QUARTERLY FINANCIAL RESULTS (UNAUDITED)

     Quarterly financial results for the years ended December 31, 2000 and 1999
     are as follows:

<TABLE>
<CAPTION>
                                                                                   Earnings        Earnings
                                                                                  per common       per common
                              Operating          Operating           Net           share -          share -
            2000               revenues           income           earnings        basic (2)      diluted (2)
     -----------------       ------------      ------------      ------------     ----------      -----------
<S>                          <C>               <C>               <C>              <C>             <C>
     First quarter           $ 30,382,899      $  1,096,810      $    672,011      $   0.10         $   0.10
     Second quarter            31,773,871         2,674,895         1,635,128          0.24             0.24
     Third quarter             34,097,502         2,789,605         1,715,278          0.26             0.26
     Fourth quarter (1)        34,857,422         3,108,496         2,397,639          0.37             0.37
                             ------------      ------------      ------------
                             $131,111,694      $  9,669,806      $  6,420,056      $   0.95         $   0.95
                             ============      ============      ============      ========         ========
</TABLE>

                                      F-23
<PAGE>

NOTE P - QUARTERLY FINANCIAL RESULTS (UNAUDITED) - CONTINUED

<TABLE>
<CAPTION>
                                                                               Earnings        Earnings
                                                                              per common       per common
                           Operating          Operating           Net           share -          share -
            1999           revenues           income           earnings        basic (2)      diluted (2)
     -----------------   ------------      ------------      ------------     ----------      -----------
<S>                      <C>               <C>               <C>              <C>             <C>
     First quarter       $ 28,730,830      $  1,192,608      $    721,206      $   0.10         $   0.10
     Second quarter        32,353,017         2,455,998         1,497,638          0.22             0.22
     Third quarter         32,614,188         1,852,961         1,120,273          0.16             0.16
     Fourth quarter        31,611,598         2,180,297         1,313,966          0.19             0.19
                         ------------      ------------      ------------
                         $125,309,633      $  7,681,864      $  4,653,083      $   0.67         $   0.67
                         ============      ============      ============      ========         ========
</TABLE>

     (1)  Fourth quarter 2000 net earnings includes unusual items comprised
          primarily of a net gain of approximately $541,000 resulting from the
          sale of a terminal during that quarter.

     (2)  Earnings per common share is computed independently for each of the
          quarters presented. Therefore, due to rounding, the sum of the
          quarterly earnings per common share do not necessarily equal the total
          for the year.

                                      F-24
<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER    EXHIBITS
-------   --------
<S>       <C>
  3.1     Articles of Incorporation of the Company (filed as Exhibit 3.1 to the
          Company's Registration Statement on Form S-1 (File No. 333-37211) and
          incorporated herein by reference).

  3.2     Bylaws of the Company (filed as Exhibit 3.2 to the Company's
          Registration Statement on Form S-1 (File No. 333-37211) and
          incorporated herein by reference).

 10.1     Loan Agreement, dated November 25, 1998, between the Company, Motor
          Cargo and Zions First National Bank (filed as Exhibit 10.1 to the
          Company's Annual Report for 1998 on Form 10-K and incorporated herein
          by reference).

 10.2     $20,000,000 Promissory Note, dated September 22, 2000, to the order of
          Zions First National Bank.*

 10.3     $5,000,000 Promissory Note, dated September 22, 2000, to the order of
          Zions First National Bank.*

 10.4     1997 Stock Option Plan (filed as Exhibit 10.2 to the Company's
          Registration Statement on Form S-1 (File No. 333-37211) and
          incorporated herein by reference).(1)

 10.5     1999 Stock Option Plan for Non-Employee Directors (filed as Exhibit
          10.1 to the Company's Quarterly Report on Form 10-Q for the quarter
          ended March 31, 1999 and incorporated herein by reference).(1)

 10.6     Pension Plan of Employees of Motor Cargo and Trust Agreement (filed as
          Exhibit 10.3 to the Company's Registration Statement on Form S-1 (File
          No. 333-37211) and incorporated herein by reference).(1)

 10.7     Restricted Stock Agreement, dated October 2, 1997, between the Company
          and Louis V. Holdener (filed as Exhibit 10.5 to the Company's
          Registration Statement on Form S-1 (File No. 333-37211) and
          incorporated herein by reference).(1)

 10.8     Form of Salary Continuation Agreement (filed as Exhibit 10.12 to the
          Company's Registration Statement on Form S-1 (File No. 333-37211) and
          incorporated herein by reference).(1)

 10.9     Management Agreement between the Company and FHF Transportation, Inc.
          (filed as Exhibit 10.18 to the Company's Registration Statement on
          Form S-1 (file No. 333-37211) and incorporated herein by reference).

 10.10    Master Truck Agreement 2000-2003, between Motor Cargo, Reno, Nevada
          and Teamsters, Chauffeurs, Warehousemen & Helpers and Professional
          Clerical, Public and Miscellaneous Employees, Local Union No. 533,
          affiliated with the International Brotherhood of Teamsters.*

 10.11    Master Truck Agreement between Motor Cargo, Salt Lake City, Utah and
          the International Brotherhood of Teamsters, Chauffeurs, Warehousemen
          and Helpers of America, Local Union No. 222 (filed as Exhibit 10.16 to
          the Company's Annual Report for 1999 on Form 10-K and incorporated
          herein by reference).
</TABLE>

<PAGE>

<TABLE>
<S>       <C>
 21       Subsidiaries of the Company (filed as Exhibit 21 to the Company's
          Registration Statement on Form S-1 (file No. 333-37211) and
          incorporated herein by reference).

 23       Consent of Grant Thornton LLP.*

</TABLE>

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(1)  Management contracts and compensatory plans and arrangements identified
     pursuant to Item 14(a)(3) of Form 10-K.

*    Filed with this report.