KLLM TRANSPORT SERVICES
                          	  1995 Annual Report


                             Company Profile

     KLLM Transport Services, Inc., through its wholly-owned subsidiary, 
KLLM, Inc., specializes in providing high-quality transportation services 
in North America.

     KLLM Inc.'s operating divisions haul both temperature-controlled and dry 
commodities.  The majority of the Company's revenues, approximately 70%, are in
the temperature-controlled sector.  Protective service is provided on
commodities such as food, medical supplies and cosmetics.  Service offerings 
include over-the-road long haul, regional, and intermodal transportation.

     The shares of KLLM Transport Services, Inc. trade on The Nasdaq Stock 
Market (National Market) under the symbol KLLM.


Financial And Operating Highlights

<TABLE>


(In thousands, except per share and 
operating data)                                1995             1994          
STATEMENT OF OPERATIONS DATA:

<S>                                          <C>              <C>
Operating revenue                            $239,685  		     $210,276          
Operating income from continuing operations     6,513        	  14,301
Net earnings from continuing operations           518         	  5,774
Earnings per share from continuing operations    0.12             1.28
Weighted average shares outstanding             4,479            4,536


BALANCE SHEET DATA:

Total assets                                   164,248  	       $166,077
Long-term debt, less current maturities         59,594            66,531
Stockholders' equity                            65,968            67,843


OPERATING DATA:
                        
Operating ratio                                    97.3%            93.2%
Total miles travelled (000s)                    175,967   	      161,584
Average miles per tractor                       112,645   	      115,650
Average revenue per total mile                     1.14             1.16
Equipment at year-end:
     Company-operated tractors                    1,485            1,290
     Owner-operated tractors                        291              242 
     Total tractors                               1,776            1,532
     Refrigerated trailers                        2,150            2,115
     Dry-van trailers                               384           ----- 
  Total trailers                                  2,534            2,115      
     Refrigerated rail containers                   202              150

</TABLE>

<TABLE>
Selected Financial And Operating Data

(In thousands, except per 
share and operating data)        1995     1994      1993    1992      1991     

STATEMENTS OF OPERATIONS DATA:


<S>                            <C>      <C>       <C>      <C>       <C>
Operating revenue              $239,685 $210,276  $165,259 $143,451  $129,571
Operating expenses              233,172  195,975   152,503  131,655   120,707
                            				-------  -------   -------  -------   -------
Operating income from 
continuing operations             6,513   14,301    12,756   11,796     8,864 
Interest and other income            32       17        11        4        18
Interest expense                 (5,554)  (5,014)   (4,384)  (4,521)   (4,037)
				                              ------  -------   -------  -------   -------
Earnings from continuing 
operations before income taxes      991    9,304     8,383    7,279     4,845  
Income taxes                        473    3,530     3,436    3,050     2,025  
				                                ----   -----     -----    -----     -----
Net earnings from continuing 
operations          		              518    5,774     4,947    4,229     2,820
Loss from operations of 
discontinued division, net of 
tax benefits                       (624)    (580)     (195)  -------   -------
Loss on disposal of 
discontinued division, 
net of tax benefit                 (441)   -------   -------- -------  ------- 
				                              ------   -------   ------   -------  -------
Net Earnings (Loss)               $(547)   $5,194    $4,752   $4,229   $ 2,820
				                              ======   =======   ======   =======  =======
				

Earnings (Loss) per share:
 From continuing operations       $ 0.12   $  1.28   $ 1.14   $  1.23  $   0.82
 From operations of 
 discontinued division             (0.14)    (0.13)   (0.05)    -----     -----
 From disposal of discontinued 
 division                          (0.10)    -----    -----     -----     -----
				                             -------    -----    -----     -----     -----  
Net earnings (loss) per 
 common share                     $(0.12)   $ 1.15   $ 1.09    $ 1.23    $ 0.82
				                             =======    =====   ======    ======    ======

Weighted average common shares 
 outstanding                     4,479     4,536    4,357     3,449     3,432  
			                              ======    =====    =====    ======    ======
</TABLE>


<TABLE>
BALANCE SHEET DATA (AT YEAR-END):

<S>                          <C>       <C>      <C>        <C>      <C>
Net property and 
equipment                    $122,264  $126,756 $117,322   $98,638   $74,722
Total assets                  164,248   166,077  150,094   123,142    96,595
Total liabilities              98,280    98,234   86,403    84,035    62,024
Long-term debt, less current 
maturities                     59,594    66,531   58,514    61,256    40,592  
Stockholders' equity           65,968    67,843   63,691    39,107    34,571   

OPERATING DATA:
Operating ratio                  97.3%     93.2%    92.3%     91.8%    93.2% 
Average number of 
truckloads per week       		    3,176     2,871    2,420     2,001     1,790
Average miles per trip          1,065     1,082    1,087     1,228     1,253    
Total miles travelled (000s)  175,967   161,584  136,777   130,206   116,624 
Average revenue per 
total mile                  $    1.14   $  1.16  $  1.13   $  1.10   $  1.10    
Empty mile percentage           11.58%      9.8%    10.3%     10.6%      9.6% 
Equipment at year-end:
     Company-operated 
     tractors                   1,485     1,290    1,240     1,063      939
     Owner-operated tractors      291       242       85     -----     -----
				                            -----     -----    -----     -----     -----
        Total tractors           1,776     1,532    1,325     1,063      939    
     Refrigerated trailers       2,150     2,115    1,955     1,694    1,370   
     Dry-van trailers              384     -----    -----     -----    -----  
				                             -----     -----    -----     -----    -----
              Total trailers     2,534     2,115    1,955     1,694    1,370
  Refrigerated rail containers     202       150    -----     -----    -------
Ratio of tractors to non-driver 
employees at year-end              3.7       2.9      2.9       2.7      2.5
Miles per gallon of fuel           6.3       6.4      6.3       6.2      6.1  

</TABLE>

<PAGE>
<TABLE>
Selected Quarterly Data (Unaudited)

                         		First     Second      Third     Fourth
					Quarter    Quarter   Quarter    Quarter
(In Thousands, except per share amounts)                                       
-------------------------------------------------------------------------------

1995

<S>                 <C>       <C>         <C>       <C>		
Operating revenue			$53,423	  $60,971     $63,158   $62,133
Operating income 
from continuing 
operations        		  2,352     2,747         697       717
Net earnings 
(loss) from 
continuing 
operations         	    619       810        (474)     (437)
Net earnings (loss)     430       681        (515)   (1,143)
Earnings (Loss) 
per share         $    0.10    $ 0.15     $ (0.11)   $(0.26)

</TABLE>

<TABLE>
1994

<S>                  <C>        <C>        <C>        <C>
Operating revenue    $46,543    $56,701    $ 55,413   $51,619
Operating income 
from continuing 
operations             1,965      5,087       4,082     3,167
Net earnings from 
continuing 
operations               521      2,362       1,747     1,144
Net earnings             337      2,167       1,568     1,122
Earnings per share    $  0.07    $  0.48     $  0.35   $ 0.25

</TABLE>

Market And Dividend Information


  The Company's common stock is traded on The Nasdaq Stock  Market  (National 
Market) under the symbol KLLM.  The number of stockholders, including 
beneficial owners holding shares in nominee or "street" name, as of February 
21,1996, was approximately 1,665.  The Company has never declared or paid a 
cash dividend on its common stock.  The current policy of the Board of 
Directors is to continue to retain earnings to finance the continued growth 
of the Company's business. 

  The following table shows quarterly high and low prices for the common stock
for each quarter of 1995 and 1994:


<TABLE>


<S>                                           <C>                     <C>
FISCAL  YEAR  1995                            High                    Low    
----------------------------------------------------------------------------
First Quarter                                 $16                     $12.75 
econd Quarter                                 $14.5                   $12
Third Quarter                                 $13.25                  $ 9
Fourth Quarter                                $11.5                   $ 9.75 

FISCAL  YEAR  1994                            High                    Low    
----------------------------------------------------------------------------
First Quarter                                 $18.75                  $14.25
Second Quarter                                $17                     $14
Third Quarter                                 $20                     $15.5
Fourth Quarter                                $20                     $14

</TABLE>

<PAGE>
Management's Discussion And Analysis Of
Financial Condition And  Results Of Operations

LIQUIDITY AND CAPITAL RESOURCES

     KLLM Transport Services, Inc.'s  primary sources of liquidity are its 
cash flow from operations and existing credit agreements of KLLM, Inc., a 
wholly-owned subsidiary.  During each of the years ended December 29, 1995 
and December 30, 1994, the Company generated $23.9 million in net cash 
provided from operating activities.

     Capital resources required by the Company during 1995 were much less 
significant than in prior years, primarily because KLLM, Inc., in January 
1995, entered into an operating lease for the majority of its revenue
equipment needs for 1995.  The payment terms of the operating lease were more
favorable than could have been obtained with financing or capital leasing.  
In 1995, the Company-operated fleet increased by 195 tractors, 419
trailers, and 52 rail containers, net of replacements.  Of the net increase 
in tractors, 400 were added under the operating lease noted above.  Capital 
expenditures, net of proceeds from trade-ins during 1995, were approximately
$8,724,000.  Net capital expenditures in 1994 were $29,586,000.  Net capital
expenditures in 1996 are expected to be approximately $25,921,000 as the 
Company returns to it's traditional method of investing in maintaining a
modern fleet.

     During late 1994, the Company began an internal restructuring of its 
operating divisions into separate operating units in order to achieve greater
accountability within those units.  In 1995, the Company continued to
fine-tune the new structure to meet the changing demands of the marketplace.
The Company has continued growth of the less capital intensive owner-operator
division and contract logistics operations.  Both of these operating units
have served as a favorable medium for increasing revenues with minimal capital 
outlays, while maintaining positive earnings.  Due to the weakened economic 
conditions in 1995, the intermodal, or rail services, division was forced to
refocus on securing annual, consistent intermodal market share. While this 
operating unit hasn't yet achieved profitability, the Company feels there is 
a viable market for intermodal temperature-controlled services.  As such,
development of the intermodal customer base is ongoing, and, at the same time,
the Company is guardedly evaluating continued participation in intermodal 
operations.  At the end of 1995, the Company discontinued that segment of the
international operations aimed at maritime containerized shipments.  This 
division proved to be unprofitable and difficult to manage; thus, in an 
effort to minimize exposure on future earnings, the Company recognized a 
one-time after-tax charge to 1995 earnings of $441,000, or $0.10 per share, 
on the disposal of that unit.  The traditional over-the-road temperature-
controlled freight operations have also made adjustments in response to
changing market conditions, including curtailed growth of the fleet.  
Through a variety of measures invoked during 1995, the Company has 
refocused attention on improving utilization and profitability in the 
core trucking business.  The more notable measures instituted  in the 
restructuring include consolidation of certain driver terminals, reducing
the number from thirteen at the end of 1994 to ten at the end of 1995, 
and reduction in the nondriver work force of approximately 85 employees 
which, on an annualized basis, will cut total annual payroll costs 
by approximately $2.6 million.  

     In addition to fine-tuning the existing structure, effective 
May 1, 1995, the Company's wholly-owned subsidiary, KLLM, Inc., acquired
substantially all of the assets of Vernon Sawyer, Inc., a regional 
dry-van truckload carrier based in Bastrop, Louisiana.  The assets 
acquired include 126 tractors and 288 dry-van trailers, which are a
part of the overall increase in fleet size noted above.  The acquisition
was financed with capital resources from operating activities in the 
amount of $6,758,000 and the assumption of revenue equipment debt in the 
amount of $3,795,000 for a total cost of $10,553,000.

     In order to more appropriately match the terms of its revolver debt 
facility with the nature of the Company's capital investments and the
expansion of divisional operations, on April 7, 1994, KLLM restructured its
revolving line of credit.  The Company has a $50,000,000 unsecured 
revolving line of credit with a syndication of banks.  Borrowings of 
$35,000,000 were outstanding at year-end.  At December 29, 1995, the 
weighted average interest rate on the revolving line of credit was 
6.32%. Under the terms of the agreement, borrowings bear interest at
(i) the higher of prime rate or a rate based upon the Federal Funds 
Effective Rate, (ii) a rate based upon the Eurodollar rates, or (iii) an 
absolute interest rate as determined by each lender in the syndication 
under a competitive bid process at the Company's option.  Facilities 
fees from 1/4% to 3/8% per annum are charged on the unused portion of 
this line.  

     The Company entered into an interest rate swap arrangement with
a bank that  effectively established a fixed interest rate of 5.23%  for 
two and one-half  years beginning April 1, 1993 on approximately 14%, or
$5,000,000, of the Company's outstanding revolving line of credit at 
December 30, 1994.  The agreement expired September 29, 1995.  At 
December 30, 1994, the weighted average interest rate on the remaining 
$31,000,000 of the revolving line of credit was 6.52%.
     
     Working capital needs have generally been met from net cash provided
from operating activities.  On April 5, 1994, in conjunction with 
restructuring the revolver debt facility, the working capital line of
credit was renegotiated.  The Company has $4,150,000 in unsecured working
capital lines of credit with a bank, of which $651,000 was used at 
December 29, 1995, and $4,000,000 was used at December 30, 1994.  Interest 
is at a rate based upon the Eurodollar rates with facility fees at 1/4% 
per annum on the unused portion of the line.

     At December 29, 1995, the aggregate principal amount of the Company's
outstanding long-term indebtedness was approximately $66.0 million.  Of 
this total outstanding, $4.0 million  was in the form of 10.2% notes due 
July 15, 1998, $20.0 million in the form of  9.11% senior notes due 
June 15, 2002, $35.0 million consisted of the revolving line of credit due 
April 7, 1997, and $7.0 million principal was relative to capital leases
with varying maturities.

     The required principal payments on all indebtedness are anticipated 
to be $5.9 million in 1996, $39.8 million in 1997, $4.9 million in 1998, 
$6.3 million in 1999, $2.9 million in 2000, and $5.7 million thereafter.

     In March 1993, the Company completed an offering to the public of 
1,150,000 shares of the Company's common stock, 100,000 shares of which 
were sold by stockholders.  The net proceeds of the offering, approximately
$19,551,000 were used to reduce the Company's borrowings under the revolving
line of credit, various capital leases and a mortgage note.

     The Company anticipates that its existing credit facilities along with 
cash flow from operations will be sufficient to fund operating expenses, 
capital expenditures, and debt service.


 RESULTS OF OPERATIONS
     The following table sets forth the percentage of revenue and expense 
items to operating revenue for the periods indicated.

<TABLE>
                                                  Percentage of
                                                Operating Revenue             
						                                        --------------------


<S>                                          <C>       <C>      <C>
For the Year                                 1995	     1994	    1993
------------------------------------------------------------------------  
Operating revenue                           100.0%     100.0%   100.0%
Operating expenses                                           
     Salaries, wages and fringe benefits     29.1       28.8     30.6
     Operating supplies and expenses         27.7       28.9     34.4   
     Insurance, claims, taxes and licenses    4.9        4.7      5.4   
     Depreciation and amortization            9.6       10.0     11.2
     Purchased transportation and equipment 
	    rent                                    22.3       16.7      6.4    
     Other                                    4.4        4.5      4.8    
     Gain on sale of revenue equipment        (.7)       (.4)     (.5)
					                                        ------     -----    -----
          Total operating expenses           97.3        93.2     92.3
					                                        ------     -----    -----
Operating income from continuing operations   2.7         6.8      7.7 
Interest expense                              2.3         2.4      2.6
					                                       -----         ----	   -----
Earnings from continuing operations  
before income taxes                           0.4         4.4      5.1
Income taxes                                  0.2         1.6      2.1
					                                        ------	      -----	  -----

Net earnings from continuing operations       0.2%        2.8%      3.0%
					                                         ======     ======	  =====
</TABLE>

Year Ended December 29, 1995 Compared to Year Ended December 29, 1994

  Operating revenue for the year ended December 29, 1995 increased by 
$29,409,000 or 14% when compared to the year ended December 30, 1994.  
The net revenue increase consisted of a 5% increase in the Company's 
traditional over-the-road temperature-controlled freight services, of 
which a 7% increase came from the owner-operator division, 1% decrease 
from rail services, 4% increase from transportation brokerage services, 
and 6% increase from the operation of the dry-van over-the-road truckload 
services.   

  The basis for the net revenue increase consists primarily of a 2% 
increase in available Company-owned equipment, 6% increase in available 
owner-operated equipment, and a 6% increase from the new dry-van operation.
The average revenue per mile decreased $0.02  to $1.14 for the year ended 
December 29, 1995 when compared to the year ended December 30, 1994.

  The operating ratio increased from 93.2% to 97.3% for the year ended 
December 29, 1995 when compared to the year ended December 30, 1994.  The 
operating ratio for the traditional over-the-road truckload services
increased from 92.5% to 97.5% primarily due to increases in certain 
variable and fixed operational costs: driver pay increased approximately 
$2.6 million, liability and workers' compensation insurance provision 
increased approximately $1.0 million, fuel increased approximately $1.2 
million, and revenue equipment rent increased approximately $0.8 million.  
These increased costs accounted for 1.9%, 0.8%, 0.9% and 0.6%, respectively, 
of the increase in the operating ratio.  Additionally, the increased 
operating ratio resulted from a significant increase in purchased 
transportation and equipment rental costs associated with the newer 
operations.  As previously noted, these divisions are low margin which 
increases the operating ratio overall; however, they are not as capital 
intensive as the traditional over-the-road freight operation.  At 
December 29, 1995, the Company had 3.7 tractors per nondriver employee 
which was higher than the prior year ratio of 2.9, and consistent with the
previously noted reduction in the nondriver work force during 1995.

  Interest expense from continuing operations for the year ended 
December 29, 1995 was $5,554,000, with an additional $303,000 from 
discontinued operations, for a total of $5,857,000.  It was 
approximately $748,000 greater than the year ended December 30, 1994.  
Interest expense increased due to a higher amount of outstanding debt on
the revolving line of credit throughout the first 11 months of the year 
ended December 29, 1995 than was outstanding the year before and higher 
weighted average interest rate on the revolving line of credit throughout 
the majority of the year ended December 29, 1995 as compared to the 
previous year.

  The provision for income taxes for the year ended December 29, 1995 
was $473,000 on continuing operations, based on a combined effective 
federal and state tax rate of 48%.  This reflects an increase in the  
effective tax rate from 38% for the year ended December 30, 1994 as 
a result of an increase in nondeductible expenses as a percentage of 
pretax income.

  As a result of the foregoing, net earnings from continuing 
operations decreased $5,256,000 or 91%  for the year ended 
December 29, 1995 when compared to the year ended December 30, 1994.

Year Ended December 30, 1994 Compared to Year Ended January 2, 1994

  Operating revenue for the year ended December 30, 1994 increased 
by $45,017,000, or 27%, when compared to the year ended January 2, 1994.
The net revenue increase consisted of 19% from the Company's traditional 
over-the-road temperature-controlled freight services, of which an 8% 
increase came from the owner-operator division, 6% from rail services, 
and 2% from transportation brokerage services.   

  Excluding the newer divisions, the basis for the net revenue increase 
consisted of 8% from an increase in available Company-owned equipment, 
7% from an increase in available owner-operated equipment, 2% from
improvements in freight rates, and 2% from an increase in the average 
miles per week per Company-owned tractor.  The average revenue per mile
increased $0.03  to $1.16 for the year ended December 30, 1994 when 
compared to the year ended January 2, 1994.

  The operating ratio increased from 92.3% to 93.2% for the year ended 
December 30, 1994 when compared to the year ended January 2, 1994.  
The operating ratio for the traditional over-the-road truckload services 
remained steady at 92.5% even though operating expenses increased 
approximately 0.3% due to a change in the treatment of certain 
previously non-deductible reimbursable expenses to the drivers.  
The impact of this change was to recognize these costs as wages to the 
drivers, along with the associated Company payroll taxes; thus resulting 
in an increase in operating expenses, additionally allowing for a 
reduction in the effective tax rate due to the change in the status of
these costs as a deductible expense for tax purposes.  Overall, the 
increased operating ratio resulted from a significant increase in purchased 
transportation and equipment rental costs associated with the newer 
operations.  As previously noted, these divisions are low margin which 
increases the operating ratio overall; however, they are not
as capital intensive as the traditional over-the-road freight operation.  
At December 30, 1994, the Company had 2.9 tractors per nondriver employee 
which was consistent with the prior year.

  Interest expense from continuing operations for the year ended 
December 30, 1994 was $5,014,000, with an additional $95,000 from 
discontinued operations, for a total of $5,109,000. It was approximately
$725,000 greater than the year ended January 2, 1994.  Interest expense 
increased due to a higher amount of outstanding debt during
the year ended December 30, 1994 than was outstanding the year before.

  The provision for income taxes for the year ended December 30, 1994 
was $3,530,000 on continuing operations, based on a combined effective 
federal and state tax rate of 38%.  This reflects a decrease in the 
effective tax rate from 41% for the year ended January 2, 1994 as a 
result of a decrease in nondeductible expenses as a percentage of pretax 
income as previously noted.

  As a result of the foregoing, net earnings from continuing operations 
increased by $827,000 or 17%  for the year ended December 30, 1994 when 
compared to the year ended January 2, 1994.

SEASONALITY

  In the transportation industry, results of operations generally show 
a seasonal pattern because customers reduce shipments during and after the
winter holiday season with its attendant weather variations.  The Company's
operating expenses have historically been higher in the winter months 
primarily due to decreased fuel efficiency and increased maintenance costs 
in colder weather.

Consolidated Balance Sheets

<TABLE>


<S>                                                <C>      <C>
At Year-End					                                   1995		   1994
----------------------------------------------------------------------------
ASSETS						(In thousands)
CURRENT ASSETS
   Cash and cash equivalents			                      $0		 $ 1,397
   Accounts receivable:
      Customers (net of allowances of 
	$479,000 in 1995 and $147,000 
	in 1994)				                                     26,709		 23,325
      Other					                                   1,078 		   738
					 	                                            ------		------
						                                             27,787		24,063

   Inventories--at cost			                          1,315		 1,191
   Prepaid expenses:
      Tires				                                     4,096		 5,314
      Taxes, licenses and permits						             3,254  	2,812
      Other					                                      555		   952
						                                            -------		-------
					                                             	 7,905		 9,078

   Deferred income taxes---Note C	                  1,940		 1,450
                                            						-------		-------
      TOTAL CURRENT ASSETS			                      38,947 	37,179

PROPERTY AND EQUIPMENT---NOTE B
   Revenue equipment and capital leases		        158,710		162,677
   Land, structures and improvements	             12,664		 11,123
   Other equipment			                              8,194		  8,947
                                            						-------		-------
						                                           179,568		182,747
   Accumulated depreciation			                   (57,304)	(55,991)
					                                            	-------		-------
						                                           122,264		126,756
						                                            -------		-------
INTANGIBLE ASSETS,
  Net of accumulated amortization of 
  $407,600 in 1995 and
  $120,000 in 1994---Note D		                      2,626		  2,142

OTHER ASSETS 					                                   411		------

           TOTAL ASSETS				                     $164,248	$166,077
                                           						========	========


LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Notes payable to banks---Note B        	       $2,758	  $4,000
   Accounts payable				                            1,247    1,356
   Accrued expenses---Note I	                     11,829	   7,314
   Current maturities of long-term debt  
   and capital leases				                          5,937	   2,483
						                                            -------	  ------
      TOTAL CURRENT LIABILITIES			                21,771	  15,153


LONG-TERM DEBT AND CAPITAL LEASES,
    Less current maturities---Note B	             59,594	  66,531

DEFERRED INCOME TAXES---Note C			                 16,915	  16,550

STOCKHOLDERS' EQUITY--Notes E and G
   Preferred stock, $0.01 par value; 
   authorized shares---5,000,000; none issued
   Common stock, $1 par value; 
   authorized shares---10,000,000; 
   issued shares---4,552,219 in 1995
   and 1994;  outstanding shares---
   4,358,653 in 1995 and 4,481,251 in 1994         4,552     4,552
   Additional paid-in capital			                  32,815	   33,121
   Retained earnings				                          30,687    31,234
						                                            -------	  -------
						                                            68,054	   68,907
   Less Common Stock in Treasury, 193,566 
  shares in 1995 and 70,968 shares in 1994, 
  at cost					                                    (2,086)   (1,064)
						                                            -------	   -------
      TOTAL STOCKHOLDERS' EQUITY		                65,968	    67,843
						                                            -------	   -------
      TOTAL LIABILITIES AND STOCKHOLDERS' 
	EQUITY					                                    $164,248   $166,077
						                                            =======	 =========

</TABLE>

See accompanying notes.

Consolidated Statements of Operations

<TABLE>


<S>                                              <C>    <C>     <C>
For The Year	(In thousands, except 
share and per share amounts)		                   1995		  1994	   1993
---------------------------------------------------------------------------
OPERATING REVENUE			                          $239,685	 $210,27   $165,259

OPERATING EXPENSES:
   Salaries, wages and fringe benefits	         69,706	  60,572     50,574
   Operating supplies and expenses              66,414 	 60,867	    56,770
   Insurance, claims, taxes and licenses        11,773 	  9,960      8,977
   Depreciation and amortization---
	Note A				                                     23,017 	 20,962	    18,514
   Purchased transportation and 
	equipment rent			                              53,370 	 35,073	    10,557
   Other				                                    10,481 	  9,357	     7,864
   Gain on sale of revenue equipment            (1,589)	   (816)      (753)
					                                           -------	--------    -------
      TOTAL OPERATING EXPENSES                 233,172	 195,975	   152,503
					                                          --------	--------   --------
      OPERATING INCOME FROM 
	CONTINUING OPERATIONS 		                        6,513	  14,301	    12,756

OTHER INCOME AND EXPENSES:
   Interest and other income		                      32	      17		       11
   Interest expense			                          (5,554)	 (5,014)    (4,384)
					                                         ---------	 --------    -------
					                                           (5,522)	 (4,997)    (4,373)
					                                          ---------	--------    -------
        EARNINGS FROM CONTINUING 
OPERATIONS BEFORE INCOME TAXES		                   991	   9,304      8,383
Income taxes---Note C			                           473	   3,530	     3,436
					                                          ---------	--------    -------
        NET EARNINGS FROM 
CONTINUING OPERATIONS			                           518	   5,774	     4,947
LOSS FROM OPERATIONS OF 
DISCONTINUED DIVISION 
(Net of tax benefits
of $351, $355 and $136 
respectively)--Note H			                          (624)	   (580)      (195)
        LOSS ON DISPOSAL  OF 
DISCONTINUED DIVISION 
(Net of tax benefit
  of $247)--Note H			                             (441)        0        	0
					                                         ----------	 ---------   -------
        NET EARNINGS (LOSS)		                    ($547)	  $5,194     $4,752
					                                         ==========	 =========  =========	

        EARNINGS (LOSS) PER SHARE:
          From continuing operations             $0.12 	   $1.28      $1.14
          From operations of 
	  discontinued division                         (0.14)	   (0.13)     (0.05)
          From disposal of discontinued 
	  division			                                   (0.10)	    0.00       0.00
					                                          ---------	 ---------   -------
        NET EARNINGS (LOSS) PER COMMON 
	SHARE			                                       ($0.12)	   $1.15      $1.09
					                                         ==========	 =========   =======


WEIGHTED AVERAGE NUMBER of COMMON 
SHARES OUTSTANDING			                        4,478,827	 4,536,144   4,357,200
					                                        ========== ==========  =========

</TABLE>
See accompanying notes.

Consolidated Statements of Stockholders' Equity


<TABLE>
		                      Common Stock			        Additional	           Total
                        -------------
				                       Treasury Stock	     Paid-in  Retained	    Stock
							                    --------------                            holders'
(In thousands)	  Shares   Amount  Shares Amount Capital Earnings     Equity
--------------   -----------------------------------------------------------

<S>              <C>      <C>     <C>    <C>    <C>     <C>          <C>
BALANCE AT 
JANUARY 3, 
1993             3,468	   $3,468		            $14,351  $21,288	      $39,107

Common stock 
issued upon 
exercise
of stock options    33        33     		           248		                  281
Offering of 
common stock---
Note E		         1,050	    1,050		             18,501	                19,551
Net earnings							                                      4,752	        4,752
		            ---------------------------------------------------------------
BALANCE AT 
JANUARY 2, 1994  4,551     4,551 		            33,100	   26,040	      63,691
Purchase of 
treasury shares, 
at cost				                       (78)  1,158)                    			 (1,158)
Sale of common 
stock---Note G			                   7	     94 	     9		                  103
Common stock 
issued upon exercise
of stock options      1		      1			                12		                   13
Net earnings							                                        5,194	      5,194
		           ---------------------------------------------------------------
BALANCE AT 
DECEMBER 30, 
1994              4,552	    4,552   (71)(1,064)  33,121  	31,234	     67,843
Purchase of 
treasury shares, 
at cost				                        (172)(1,763)                   			 (1,763)
Sale of 
common stock
---Note G			                          5		   74	    (22)		                 52
Common stock 
issued upon 
exercise
of stock options                     44		  667    (284)		                383
Net loss						                                              (547)       (547)
		           ----------------------------------------------------------------
BALANCE AT 
DECEMBER 29, 
1995		          4,552	    $4,552   (194)($2,086) $32,815 	$30,687	    $65,968
		           ================================================================
</TABLE>


See accompanying notes.

<TABLE>
Consolidated Statements of Cash Flows


<S>                                           <C>        <C>        <C>
For The Year	(In thousands)		                 1995 		    1994		     1993
-----------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
   Cash received from customers		             $248,165	  $215,150   $160,169
   Interest and other income received	              59	        17	        11
   Cash paid to suppliers and employees	      (217,523)	 (185,072)  (135,349)
   Interest paid		                              (5,999)	   (5,250)    (4,401)
   Income taxes refunded		                          87	       391	        41
   Income taxes paid			                           (856)	   (1,349)    (1,640)
					                                            --------- 	---------	------
NET CASH PROVIDED FROM 
OPERATING ACTIVITIES			                         23,933	    23,887     18,831

CASH FLOWS FROM INVESTING 
ACTIVITIES
   Purchase of Vernon Sawyer 
   Assets---Note D			                           (6,758)
   Purchase of Fresh International 
   Transportation, Inc.---Note D			                       (2,566)
   Purchases of property and equipment	        (19,890)  (36,108)     (41,807)
   Proceeds from disposition of 
	  equipment			                                 11,166	    6,522	       5,184
					                                           -------- 	-------      	------
NET CASH FLOWS USED IN 
INVESTING ACTIVITIES	                          (15,482)	 (32,152)     (36,623)

CASH FLOWS FROM FINANCING 
ACTIVITIES
   Proceeds from sale of common stock               52	      103        19,551
   Proceeds from exercise of 
	stock options			                                  383	       13	          281
   Purchase of Common Stock for 
	Treasury			                                    (1,763)	  (1,158)
   Net increase (decrease) in 
   borrowing under revolving 
    line of credit			                           (1,000)	  10,500	        1,500
   Repayment of long-term debt 
	and capital leases		                           (4,171)	  (2,665)	      (4,781)
   Net change in borrowing under 
	working capital line of credit	                (3,349)	   2,000	        2,000
					                                         -----------	-----------	--------
NET CASH FLOWS (USED IN) PROVIDED 
BY FINANCING ACTIVITIES			                      (9,848)	   8,793	       18,551
					                                        -----------	------------	--------
NET INCREASE (DECREASE) IN CASH 
AND CASH EQUIVALENTS			                         (1,397)      528 	         759
CASH AND CASH EQUIVALENTS AT 
BEGINNING OF YEAR			                             1,397	      869	          110
		                                         			-----------	------------	--------
CASH AND CASH EQUIVALENTS AT 
END OF YEAR			                                      $0	   $1,397	         $869
					                                        ===========	=============	========


RECONCILIATION OF NET EARNINGS 
(LOSS) TO NET CASH
PROVIDED FROM OPERATIONS
   Net income (loss)			                         ($547)	   $5,194        $4,752
   Noncash expenses and gain 
	included in income:
      Depreciation and amortization            23,141	    20,962 	      18,514
      Deferred income taxes		                    (125)	    2,850	        2,460
      Book value of equipment written 
	off in accidents		                               375	       241	          178
      (Increase) in accounts receivable         2,287) 	  (1,995)	      (5,947)
      (Increase) decrease in inventory 
	and prepaid expenses		                         1,069	    (1,375)	      (1,962)
      (Increase) in other assets	                (411)     -----	        -----
      Increase (decrease) in accounts 
	payable and accrued expenses                   4,382	    (1,174)	       1,589
      Gain on sale of equipment		              (1,664)      (816)	        (753)
					----------	----------	--------
NET CASH PROVIDED FROM OPERATIONS   	         $23,933    $23,887     	 $18,831
					                                          ==========	===========	========

						
</TABLE>
See accompanying notes.



<PAGE>
Notes to Consolidated Financial Statements


NOTE A---SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


     Business.  The Company, through its wholly-owned subsidiary, KLLM, Inc., 
provides transportation services in North America for both temperature-
controlled and dry commodities.  Services provided include over-the-road long 
haul, regional, and intermodal transportation.  The demand for transportation
services is affected by general economic conditions and is subject to seasonal
demand for certain commodities and severe weather conditions.

     Principles of Consolidation.  The consolidated financial statements 
include the accounts of the Company and its wholly-owned subsidiaries.  All 
significant intercompany balances and transactions have been eliminated in 
consolidation.  Certain reclassifications have been made to conform with current
year presentation.

     Cash Equivalents.  Cash equivalents are stated at cost which approximates 
market.

     Tires in Service.  The cost of original equipment and replacement tires 
placed in service is capitalized and amortized over the estimated useful life 
of the tires.  The cost of recapping tires is expensed as incurred.

     Property and Equipment.  Property and equipment is stated at cost.  
Depreciation of property and equipment is provided by the straight-line method
over the estimated useful lives.  Gains and losses on sales or exchanges of 
property and equipment are included in operations in the year of disposition.
The Company changed the estimated salvage value of certain revenue equipment 
as of January 4, 1993 to reflect increases in the prices for used equipment.  
The change resulted in an increase to the net loss of $281,000, or $0.06 per 
share, for the year ended December 29, 1995, resulting from a decrease
to the gain on sale of revenue equipment partially offset by lower 
depreciation expense, and a  decrease in depreciation expense of $716,000 
and an increase in net earnings of  $415,000, or $0.09 per share, for each 
of the years ended December 30, 1994 and January 2, 1994.

     Use of estimates.  The preparation of the financial statements in 
conformity with generally accepted accounting principles requires management 
to make estimates and assumptions that affect the amounts reported in the 
financial statements and accompanying notes.  Actual results could differ from
those estimates.

     Revenue Recognition.  Revenue is recognized on the date the freight is 
received for shipment.  Estimated costs of delivery of shipments in transit 
are accrued.  The Company's method of revenue recognition is not materially 
different from the method of recognizing revenues based on relative transit 
time incurred which is considered an acceptable method of accounting for 
freight-in-transit by the Emerging Issues Task Force of the Financial 
Accounting Standards Board.

     Earnings Per Common Share.  Earnings per common share is based on the 
weighted average number of common shares outstanding during each year.

     Fiscal Year.  The Company's fiscal year-end is the Friday nearest D
ecember 31, which was December 29, 1995 and December 30, 1994 for the past 
two fiscal year ends.  Prior to this, the Company's fiscal year-end was  
the Sunday nearest December 31, which was January 2, 1994 for the prior 
year.  The change in fiscal year-end cut-off did not have a significant
effect on the Company's results of operations or financial condition for 
fiscal years ended December 29, 1995 and December 30, 1994.

     Impact of Recently Issued Accounting Standards.  In March 1995, the 
FASB issued Statement No. 121, Accounting for the Impairment of Long-Lived 
Assets and for Long-Lived Assets to Be Disposed Of, which requires impairment 
losses to be recorded on long-lived assets used in operations when indicators 
of impairment are present and the undiscounted cash flows estimated to be 
generated by those assets are less than the assets' carrying amount.  
Statement 121 also addresses the accounting for long-lived assets that are 
expected to be disposed of.  The Company will adopt Statement 121 in the first
quarter of 1996 and, based on current circumstances, does not believe the 
effect of adoption will be material.


Notes To Consolidated Financial Statements (Continued)

<TABLE>
NOTE B---CREDIT FACILITIES, DEBT AND CAPITAL LEASES


<S>                                                 <C>      <C>
Long-term debt and capital leases consisted 
of the following:                                   1995    	1994
-------------------------------------------------------------------------     
                                                                             
(In thousands)
9.11% unsecured notes payable to 
insurance companies with semi-annual 
interest payments and annual principal 
payments of $2,857,000 from 1996 
through 2002                   		                 $20,000	  $20,000

10.2% unsecured notes payable to 
insurance company with semi-annual
interest payments and annual principal 
payments of $1,250,000 through July 1998            3,750	    5,000

Revolving line of credit with banks, 
with floating interest(6.32% weighted average rate at 
December 29, 1995)			                              35,000  	 36,000

Capital lease obligations with interest 
rates from 6.2% to 6.68%
and monthly payments of $144,000 through 
June 1999              			                          6,781	    8,014
					                                       -------------	----------
                                                   65,531    69,014

Less current maturities                            (5,937)   (2,483)
					                                       -------------   ----------
                                                  $59,594  	$66,531
					                                         =============	==========

</TABLE>

     Capital lease obligations represent leased revenue equipment 
capitalized for $10,938,000 with accumulated amortization of 
ation of 
$4,443,000 and $3,228,000 at year-end 1995 and 1994, respectively.

     The Company has a $50,000,000 unsecured revolving line of credit.
In accordance with the agreement, the Company has agreed to limit assets 
pledged on any other borrowing.  At December 29, 1995, $15,000,000 was 
available to the Company under the revolving line of credit.  Under the 
terms of the agreement, borrowings bear interest at (i) the higher
of prime rate or a rate based upon the Federal Funds Effective Rate, 
(ii) a rate based  upon the Eurodollar rates, or (iii) an absolute interest 
rate as determined by each lender under a competitive bid process at the 
Company's option.  Facilities fees from 1/4% to 3/8% per annum are charged 
on the unused portion of this line.

     The aggregate annual maturities of long-term debt and capital leases 
at December 29, 1995 are as follows:

<TABLE>



<S>                    <C>             <C>           <C>
                    	  Long-term 	      Capital
(In thousands)         Debt             Leases	       Total   
--------------------------------------------------------------------------
1996		                 $    4,107      $   2,204      $ 6,311
1997                       39,107          1,045       40,152
1998                        4,107          1,045        5,152
1999                        2,857          3,498        6,355
2000                        2,857          -------      2,857
Thereafter                  5,715          -------      5,715
			                       ------------     --------    ------	
                           58,750           7,792      66,542
Less amount 
representing interest      -------         (1,011)     (1,011)
		                       	----------	   -----------	   -------
                         $ 58,750      	$   6,781      $65,531
			                      ==========   	===========   	========

</TABLE>

     The Company also has $4,150,000 in unsecured working capital lines of 
credit, of which $651,000 was used at December 29, 1995.  Interest is at a 
rate based upon London Interbank Offered Rate (LIBOR)  on borrowings on the 
working capital lines with facility fees at 1/4% per annum on the unused 
portion of the line.

     Under the terms of the lines of credit and notes payable agreements, 
the Company agreed to maintain minimum levels of consolidated tangible net 
worth and cash flows, to limit additional borrowing based on a debt-to-
consolidated tangible net worth ratio, and to restrict assets that can be 
pledged on any other borrowings.  The agreements also establish
limits on dividends, stock repurchases, and new investments.  The Company is 
in compliance with these provisions at year-end 1995 and 1994, as amended 
subsequent to year end December 29, 1995.

Notes To Consolidated Financial Statements (Continued)


NOTE C---INCOME TAXES

     The Company adopted the Financial Accounting Standards Board Statement 
No. 109, "Accounting for Income Taxes" effective January 1, 1993.  The 
adoption of Statement 109 had no material effect on the Company's accounting 
for income taxes.  Prior to the adoption of Statement 109, income tax expense
and the classification of deferred income taxes were determined using the 
method prescribed by Statement 96, which is superseded by Statement 109.

     Deferred income taxes reflect the net tax effects of temporary 
differences between the carrying amounts of assets and liabilities for 
financial reporting purposes and the amounts used for income tax purposes.  
The components of deferred tax assets and liabilities are as follows:
<TABLE>

<S>                                               <C>        <C>
(In thousands)                                    1995      	1994
--------------------------------------------------------------------------
Deferred Tax Assets:
     Allowance for doubtful accounts              $  173       $  57
     Accrued expenses                              1,767       1,393
                                          						  -------      ------
                                                  $1,940      $1,450
						                                            =======     =======

Deferred Tax Liabilities:
     Property and equipment                      $19,305     $17,465
     Intangibles                                     (40)     -----
     Net Operating Loss Carryforward              (1,414)     -----
     Alternative minimum tax carry forward	        (936)       (915)
                                           						---------    --------
					                                            $16,915     $16,550
						                                           =========    ========

</TABLE>

<TABLE>
     Income tax expense (benefit) consist of the following:


<S>                               <C>     <C>         <C>
(In thousands)             	      1995	   1994        1993
-----------------------------------------------------------------------  

Current:
     Federal                     $ ----	  $ 230       $ 550
     State                         ----      95         290
				                           --------	  -------    --------
                                   ----     325         840
Deferred:
     Federal                $ (115)       2,600	      2,150
     State                     (10)         250         310
				                         --------	  -------    --------
                              (125)       2,850       2,460

Total income tax 
expense (benefit)          $  (125)      $3,175      $3,300
Less:  Income tax benefit 
allocated to discontinued
 operations                   (351)        (355)       (136)
    Income tax benefit 
    allocated 
    to loss on disposal of 
    discontinued operations   (247)       -----       -----
				                          --------	 --------    -------- 
Income Tax Expense 
attributable 
to continuing operations    $   473       $3,530      $ 3,436
				                          =========	 =========   ========
</TABLE>

<TABLE>
    The reconciliation of income tax computed at the federal statutory tax 
rate to income tax expense is as follows:

<S>                                   <C>         <C>          <C>
(In thousands)                        1995        1994         1993  
-----------------------------------------------------------------------------
Statutory federal income 
tax rate                            $ (228)    	$ 2,845      $ 2,738
Nondeductible driver related 
expenses                             ------      -----           294
State income taxes, net                 (7)         232          396
Other 				                             110           98         (128)
				                                 ------	     ------	     --------
                                 $    (125)    $  3,175     $  3,300
				                               =========    ========	    =========

</TABLE>

     The Company has a net operating loss carryforward for income tax purposes
of approximately $3,725,000, which expires in the year 2010.


Notes to Consolidated Financial Statements (Continued)


NOTE D---ACQUISITIONS

     Effective May 1, 1995, the Company acquired substantially all of the 
assets of Vernon Sawyer, Inc., a regional dry-van truckload carrier based 
in Bastrop, Louisiana.  Results from operations of the Company include
operations of the net assets acquired since May 1, 1995.  Acquisition cost
includes $772,000 of intangibles, a three year non-compete agreement.  The 
non-compete agreement is being amortized by the straight-line method over 
the life of the agreement.

     Pro forma unaudited revenues, net income (loss) and net income (loss) 
per share for the years ended December 29, 1995 and December 30, 1994, 
assuming the purchase of substantially all of the assets of Vernon Sawyer, 
Inc. had occurred on January 3, 1994, would have been $245,193,000, 
($406,000), and ($0.09), and $226,094,000, $5,355,000, and $1.18,
respectively.

     Effective March 1, 1994, the Company acquired all of the outstanding 
stock of Fresh International Transportation, Inc., a company which provides 
temperature controlled transportation via double-stack containers on railroads.
Results from, operations of the Company include operations of Fresh 
International Transportation, Inc.  since March 1, 1994.  The excess
purchase price over the fair value of the assets acquired is classified 
as goodwill and is included in intangibles in the accompanying balance sheet.  
Goodwill is being amortized by the straight-line method over fifteen years.  
Prior operations of Fresh International Transportation, Inc. are immaterial 
to the Company's revenues, net earnings and earnings per sha3.


NOTE E---OFFERING OF COMMON STOCK

     In March 1993, the Company completed an offering of 1,150,000 shares of 
the Company's common stock, 100,000 shares of which were sold by stockholders, 
with net proceeds to the Company of approximately $19,551,000.  Proceeds from
the offering were used to reduce the Company's borrowing under the revolving 
line of credit, capital leases and a mortgage note.


NOTE F---CONCENTRATIONS OF CREDIT RISK

     The Company had one customer which accounted for operating revenues of 
$23,311,000 in 1995, $29,353,000 in 1994, and $24,915,000 in 1993.

     Trade accounts receivable are the principal financial instruments that 
potentially subject the Company to significant concentrations of credit risk.  
The Company performs periodic credit evaluations of its customers and credit
losses have been insignificant and within management's expectations.


NOTE G---EMPLOYEE BENEFIT PLANS

     The Company sponsors a defined contribution plan covering substantially
all of its employees.  Contributions to the plan are 200% of the employee 
contribution up to 4% of each covered employee's salary.  Contributions under 
the plan approximated $653,000, $486,000, and $345,000 in 1995, 1994, and 1993, 
respectively.

     The Company grants stock options for a fixed number of shares to employees 
with an exercise price equal to the fair value of the shares at the date of 
grant. The Company accounts for stock option grants in accordance with APB 
Opinion No. 25, Accounting for Stock Issued to Employees, and, accordingly, 
recognizes no compensation expense for the stock options granted.


Notes to Consolidated Financial Statements (Continued)

      Under the Company's Incentive Stock Option Plan 533,333 shares of Common 
Stock have been reserved for grant to key employees and directors.  Options to 
purchase an aggregate of 332,000  shares at prices ranging from $7.125 to
$21.00 per share are outstanding at December 29, 1995.  At December 29, 1995, 
options for 203,000 shares were exercisable.

     In April 1987, the stockholders approved an employee stock purchase plan 
reserving 133,333 shares of Common Stock for the plan.  Substantially all 
employees are eligible to participate and may subscribe for 10 to 300 shares 
each.  During 1995, 4,902  shares were purchased and in 1994, 6,532  shares 
were issued pursuant to the plan.  Subsequent to December 29, 1995, an 
additional 17,489  shares have been subscribed for by employees.


NOTE H---DISCONTINUED OPERATIONS

     The Company's management reached the decision to discontinue its 
international division which primarily provided maritime transportation 
services. Cessation of operations began on November 30, 1995, and are 
expected to be completed by June 30, 1996, after certain contractual 
obligations are completed.

     Sales of the international division were $10,651,000, $6,869,000, 
and $222,000 in 1995, 1994, and 1993, respectively.  The loss on disposal 
of discontinued operations includes approximately $62,000 (net of $35,000 
tax benefit) of operational losses from November 30, 1995 through December 
29, 1995.  No additional loss from operations of the discontinued division 
through the disposal date are anticipated by the Company.

     Interest expense of $303,000, $95,000, and $0 was allocated to 
discontinued operations in 1995, 1994 and 1993, respectively, based on the 
relative net assets of the discontinued operations compared to total net 
assets.

     At December 29, 1995, the assets of the division consisted 
primarily of trade accounts receivable of $1,658,000 and
liabilities of $1,010,000, which include estimated costs to close 
the division.


NOTE I---COMMITMENTS AND CONTINGENCIES

     The Company self-insures for losses related to liability and 
workers' compensation claims with excess coverage by underwriters on a per 
incident basis.  Accrued expenses include $3,827,000 at December 29, 1995 
and $2,640,000 at December 30, 1994 applicable to claims payable.  
The ultimate cost for outstanding claims may vary significantly from
current estimates.

     The Company leases certain revenue equipment and data processing 
equipment under operating leases that expire over the next six years.  
The leases require the Company to pay the maintenance, insurance, taxes 
and other expenses in addition to the minimum monthly rentals.  
Future minimum payments under the leases at December 29, 1995 are $7,590,000
in 1996, $7,356,000 in 1997, $6,601,000 in 1998, $4,348,000 in 1999, and 
$952,000 in 2000.  Rental expense applicable to noncancelable operating 
leases totaled $7,042,000 in 1995, $2,769,000 in 1994, and $2,288,000 in 1993.

     The Company has entered into heating oil (diesel fuel) swap agreements 
in order to hedge its exposure to price fluctuations on approximately 12% of 
its 1996 anticipated fuel requirements and less than 1% of its 1997 
anticipated fuel requirements.   Gains and losses on hedging contracts are 
recognized in operating expenses as part of the fuel cost over the
hedge period.  Also, the Company establishes prices for a portion of its 
anticipated fuel purchases over specified periods of time through various 
fuel purchase agreements.

     The Company is also involved in various claims and routine litigation 
incidental to its business.  Management is of the opinion that the outcome 
of these other matters will not have a material adverse effect on the 
consolidated financial position or operations of the Company.

Report of Independent Auditors

The Board of Directors and Stockholders
KLLM Transport Services, Inc.

     We have audited the accompanying consolidated balance sheets of KLLM 
Transport Services, Inc. and subsidiaries as of December 29, 1995 and December 
30, 1994, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the three years in the period ended December 
29, 1995.  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 generally accepted auditing 
standards.  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 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of KLLM Transport 
Services, Inc. and subsidiaries at December 29, 1995 and December 30, 1994, 
and the consolidated results of their operations and their cash flows for 
each of the three years in the period ended December 29, 1995, in conformity 
with generally accepted accounting principles.

Jackson, Mississippi
January 29, 1996, except for Note B as to
    which the date is March 13, 1996

<PAGE>
Directors And Officers


BOARD OF DIRECTORS                           OFFICERS  (Continued)

BENJAMIN C. LEE, JR..                        IRENE C. HOWARD
Chairman of the Board                        Corporate Group
KLLM Transport Services, Inc.                Vice President--Human Resources 
                                             and 
                                             Risk Management
STEVEN K. BEVILAQUA                               
President and Chief Executive Officer        C. ALAN CLARK
KLLM Transport Services, Inc.                Corporate Group
                                             Vice President--Information 
                                             Systems
WALTER P. NEELY, PH. D.                           
J. Army Brown Chair of Business              JAMES T. MERRITT
Administration                               Transport Group
Professor of Finance                         Senior Vice President--
Sales and Marketing
Else School of Management, 
Millsaps College
                                             STEVEN L. DUTRO
JAMES L. YOUNG                               Transport Group
Attorney                                     Vice President--Finance
Young, Williams, Henderson 
and Fuselier, P.A.                                        
                                             WILLIAM M. CREEL
LELAND R. SPEED				                          Transport Group
Chairman of the Board and 		                 Vice President--
Chief Executive Officer                	     Field Operations
The Parkway Company
                                             JOSEPH. M. STIANCHE
C. TOM CLOWE, JR.                            Transport Group
President and Chief Operating Officer        Vice President--Maintenance
Missouri Gas Energy                               
                                             VINCENT A. SCHOTT
                                             Transport Group               
OFFICERS                                     Vice President--
                                             Information Systems
                                             
BENJAMIN C. LEE, JR.    		                   JAMES M. RICHARDS, JR.
Chairman of the Board                        Transport Group     
                                             Vice President--Customer Service
STEVEN K. BEVILAQUA                               
President and Chief Executive Officer        THOMAS J. SHEPHERD  
                                             Transport Group               
J. KIRBY LANE                                Vice President--Dedicated Logistics
Executive Vice President and Chief                     
      Financial Officer                                
                                             
JAMES P. SORRELS
President--Express Systems and
      Contract Logistics

WILLIAM J. LILES III                                   
President--Rail Services

KENNETH O. ANDERS                                 
President--International Operations
                                             
NANCY M. SAWYER                                   
President--Vernon Sawyer
                       
                                            

Stockholder Information


CORPORATE  OFFICES
KLLM Transport Services, Inc.
3475 Lakeland Drive
Jackson, Mississippi  39208
(601) 939-2545

TRANSFER  AGENT
Society National Bank
Corporate Trust Division
P. O. Box 6477
Cleveland, Ohio  44101
(800) 542-7792

INDEPENDENT  AUDITORS
Ernst & Young LLP
Jackson, Mississippi

FORM  10-K
Information about KLLM Transport Services, Inc.,
including the Form 10-K, may be obtained without charge
by writing to Mr. J. Kirby Lane, Executive Vice President,
at the Company's corporate offices.

ANNUAL  MEETING
10:00 a.m.
April 16, 1996
KLLM Corporate Offices
3475 Lakeland Drive
Jackson, Mississippi