UNITED STATES
                 SECURITIES AND EXCHANGE COMMISSION
                    Washington, D. C.  20549
                           FORM 10-Q
      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934



For the Period Ended
October, 2, 1998                 Commission File Number 0-14759

                 KLLM TRANSPORT SERVICES, INC.
     (Exact name of registrant as specified in its charter)

      Delaware
(State or other jurisdiction of             (I.R.S. Employer
  incorporation or organization)           Identification No.)
                                             64-9412551

     135 Riverview Drive
  Richland, Mississippi                                 39288
(Address of principal executive offices)               (Zip Code)

 Registrant's telephone number, including area code  
  (601) 939-2545

      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,
and (2) has been  subject to such filing requirements for the past
90 days.

              Yes  X       No

      4,326,035 Common Shares were outstanding as of October 2,
1998.



                       KLLM TRANSPORT SERVICES, INC.  AND
                                SUBSIDIARIES


                                  INDEX


Page

Number

    PART I.  FINANCIAL INFORMATION:
    Item 1.  Financial Statements
               Condensed Consolidated Balance Sheets
               October 2, 1998 (Unaudited) and January 2, 1998      1

          Consolidated Statements of Earnings (Unaudited)
          Thirteen weeks and Thirty-nine weeks ended
          October 2, 1998 and October 3, 1997                       2

          Condensed Consolidated Statements of Cash Flows
          (Unaudited)
          Thirty-nine weeks ended October 2, 1998 and October 3,
          1997                                                      3

          Notes to Condensed Consolidated Financial Statements
          Unaudited)                                                4
          
       Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations                       5
          
    PART II.  OTHER INFORMATION:
       Item 6.  Exhibits and Reports on Form 8-K



                   KLLM TRANSPORT SERVICES, INC
                         AND SUBSIDIARIES
               CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>

<S>                                     <C>            <C>
                                        October 2,      January 2,
                                        1998           1998
                                        --------------------------
                                        (Unaudited)         (Note)
                                             (In Thousands)
ASSETS

Current assets:
     Cash and cash equivalents               $2,161           $670
     Accounts receivable, net                22,141         20,824
     Inventories - at cost                      679            635
     Prepaid expenses:
          Tires                               3,048          2,885
          Other                                 860          2,494
     Assets held for sale                     1,530          3,383
     Deferred income taxes                    5,413          5,413
                                             _______        ______
               Total current assets          35,832         36,304

Property and equipment                       138,167       137,216
     Less accumulated depreciation           (33,162)      (29,276)
                                             _______        _______
                                             105,005        107,940

Intangible assets, net                             0             90

Other assets                                     114            201
                                              ______         ________
                                            $140,951       $144,535
                                            ========        ========

                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued expenses     $16,749         $15,912
     Accrued claims expense                  14,779          13,913
     Current maturities of long-term debt
       and capital leases                     2,857           4,898
                                             ______         _______
          Total current liabilities          34,385          34,723

Long-term debt and capital leases, less
  current maturities                         39,571         44,826

Deferred income taxes                        12,875         12,875

Stockholders' equity:
     Preferred Stock, $.01 value;
     authorized 5,000,000 shares;
     none issued Common Stock,
     $1 par value; 10,000,000 shares
      authorized;issued shares - 4,558,754
      in 1998 and 1997;outstanding shares -
      4,326,035 in 1998 and 4,373,155
      in 1997.                               4,559           4,559
     Additional paid-in capital              32,860         32,854
     Retained earnings                       19,174         16,733
                                            _______        _______
                                             56,593         54,146
                                        
     Less Common Stock in Treasury, at cost,
     232,719 shares in 1998 and 185,639
     shares in 1997.                         (2,473)        (2,035)
                                            _______        ________
          Total stockholders' equity         54,120         52,111
                                            _______        ________
                                           $140,951       $144,535
                                          =========      =========

</TABLE>

Note: The balance sheet at January 2, 1998 has been derived from
the audited financial statements at the date indicated, but does
not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements.

See accompanying notes.


                   KLLM TRANSPORT SERVICES, INC.
                         AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF EARNINGS
                            (Unaudited)
<TABLE>

<S>                      <C>                      <C>
                         Thirteen Weeks Ended     Thirty-Nine Weeks Ended    
                         October 2 October 3      October 2 October 3,
                         1998      1997            1998      1997
                         ---------------------    ----------------
                              (In Thousands, Except Per Share
                                          Amounts)


OPERATING REVENUE FROM
TRUCK LOAD OPERATIONS         $55,102   $60,127   $174,405  $183,338

OPERATING EXPENSES:
  Salaries, wages and
    fringe benefits            17,119    18,364     54,956    56,507
  Operating supplies
    and expenses               13,977      14,784   42,822    46,341
  Insurance, claims,
    taxes and licenses          3,550       3,430   10,738    10,965
  Depreciation and
    amortization                4,595     5,426     13,769    15,857
  Purchased transportation
    and equipment rent         12,588    12,875     38,755    39,704
  Other                         2,809     2,786      8,523     8,055
  (Gain) loss on sale of
    revenue equipment            (798)     (109)    (1,005)      240
                            --------------------     ----------------
TOTAL OPERATING EXPENSES
FROM TRUCK LOAD OPERATIONS     53,840    57,556    168,558   177,669
                           --------------------     ----------------


OPERATING INCOME FROM TRUCK
LOAD OPERATIONS               1,262,2       571      5,847     5,669

OPERATING REVENUE FROM RAIL
CONTAINER OPERATIONS               0         0          0      3,319
OPERATING EXPENSES                 0         0          0      4,128
RESTRUCTURING CHARGE - Note C      0         0          0      1,906
                            --------------------     ----------------

OPERATING LOSS FROM RAIL
CONTAINER OPERATIONS               0         0          0     (2,715)

Interest and other income          8)       (10)      (934)      (53)
Interest expense                  874     1,119      2,700     3,234
                            --------------------     ----------------
                                  866     1,109      1,766     3,181

EARNINGS (LOSS) BEFORE
INCOME TAXES                      396     1,462      4,081      (227)
Income taxes                      165       575      1,640       (50)
                            --------------------     ----------------

NET EARNINGS (LOSS)              $231      $887     $2,441     ($177)


BASIC AND DILUTED EARNINGS
 (LOSS) PER COMMON SHARE        $0.05     $0.20      $0.56    ($0.04)


</TABLE>
See accompanying notes.


                                 
                   KLLM TRANSPORT SERVICES, INC.
                         AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Unaudited)
<TABLE>

<S>                                <C>          <C>
                                   Thirty-Nine Weeks Ended
                                   October 2    October 3,
                                   1998         1997
                                   ------------------------
                                      (In Thousands)


NET CASH PROVIDED BY OPERATING
     ACTIVITIES                         $16,232   $21,856

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment  (19,527)  (33,243)
   Proceeds from disposition of property,
   equipment and assets held for sale    12,550     8,579

NET CASH FLOWS USED IN INVESTING
      ACTIVITIES                         (6,977)  (24,664)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from exercise of stock
      options                               0        213
   Purchase of common stock for treasury (468)       0
   Net increase in borrowings under
    revolving line of credit              1,000     8,000
   Repayment of long-term debt, capital
     leases,and notes payable to banks   (8,296)   (4,879)
   Net decrease in borrowings under
     working capital line of credit          0     (3,400)
                                   ----------     ----------
NET CASH FLOWS  USED IN
     FINANCING ACTIVITIES                (7,764)      (66)

Net Increase (Decrease)in Cash and
     Cash Equivalents                     1,491    (2,874)
Cash and Cash Equivalents at Beginning
     Of Period                              670     2,874
                                       --------- ----------
Cash and Cash Equivalents at End
     Of Period                           $2,161        $0
                                      ========= ==========

</TABLE>

See accompanying notes.




                  KLLM TRANSPORT SERVICES, INC
                        AND SUBSIDIARIES
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                          (Unaudited)
      NOTE A-  BASIS OF PRESENTATION
     The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information.
They have been prepared in accordance with the instructions to
Form 10-Q and Article 10 of Regulation S-X and accordingly, do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included.

     As of January 3, 1998, the Company adopted Financial
Accounting Standards Board Statement No. 130, Reporting
Comprehensive Income.  Statement No. 130 establishes new rules for
the reporting and display of comprehensive income and its
components; however, the adoption of this Statement had no impact
on the Company's consolidated net income or shareholders' equity.
Statement No. 130 requires unrealized gains or losses on the
Company's available-for-sale securities and foreign currency
translation adjustments, which prior to adoption were required to
be reported separately in shareholders' equity, to be included in
other comprehensive income.  The Company has no available-for-sale
securities or foreign currency translation adjustments; therefore,
no disclosure is necessary for the third quarter of 1998.

     In March 1998, the American Institute of Certified Public
Accountants issued Statement of Position (SOP)
98-1, Accounting for the Costs of Computer Software Developed for
or Obtained for Internal-Use.  The SOP is effective for financial
statements for fiscal years beginning after December 15, 1998 and
restatement of previously issued annual financial statements or
adoption by cumulative catch-up adjustment is prohibited.  The
Company has elected early adoption of SOP 98-1 for its fiscal year
beginning January 3, 1998.  The SOP requires the capitalization of
certain costs incurred after the date of adoption.  During the
first nine months of 1998, the Company incurred no material costs
for the development of software.

NOTE B- FISCAL YEAR

     The Company has adopted a fiscal year-end on the Friday
nearest December 31.  Accordingly, the third quarter of 1998 ended
on Friday, October 2, 1998.

NOTE C- COMMITMENTS AND CONTINGENCIES

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

     The Company has entered into heating oil (diesel fuel) swap
agreements in order to hedge its exposure to price fluctuations.
At October 2, 1998, the Company had approximately 23% of its
remaining 1998 anticipated fuel requirements and approximately 5%
of its 1999 anticipated fuel requirements under swap agreements
which expire in May 1999.  Gains and losses on hedging contracts
are recognized in operating expenses as part of the fuel cost over
the hedge period.

            MANAGEMENT'S DISCUSSION AND ANALYSIS
         OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

     Operating revenue for the third quarter of 1998 decreased
8.3% from the comparable period of 1997.  The decrease in
operating revenue in the third quarter consisted of a 9.7%
decrease from the Company's traditional over-the-road temperature-
controlled freight services, net of a 1.4% increase from the dry-
van over-the-road truckload division. The decline in revenue
reflects the ongoing challenge of attracting and retaining
qualified drivers.  The average revenue per mile excluding fuel
surcharges increased from $1.122 to $1.125 for the third quarter
of 1998 as compared to the same period in 1997.  In 1997, fuel
surcharges increased revenue slightly by $0.003 per mile.

     For the year, operating revenue decreased 4.9% from the first
nine months of 1997 reflecting a similar decrease in the Company's
traditional over-the-road temperature-controlled business and an
increase in the dry-van over-the-road truckload business.

     The challenge of attracting and retaining drivers had an
adverse effect on profitability in the third quarter.  The
operating ratio increased from 95.7% to 97.7% for the third
quarter of 1998 compared to the same period in 1997.  During the
first nine months of 1998 the operating ratio improved slightly
from 96.9% in 1997 to 96.7%.

     On September 1, 1998, the Company implemented a restructured
pay package for certain drivers.  Although average driver
compensation rates have increased since the third quarter of 1997,
fewer miles driven and reductions in nondriver compensation have
resulted in a net decrease in salaries, wages, and benefits of
$1,245,000 and $1,551,000 for the third quarter and first nine
months of 1998.  Operating supplies decreased $807,000 in the
third quarter compared to the same period last year primarily due
to lower fuel prices ($595,000) and cost control efforts offset by
an increase in repair costs.  For the year, insurance, claims,
taxes and licenses are $227,000 below 1997; however, in the third
quarter, these costs were $120,000 above the third quarter of 1997
primarily reflecting a higher number of claims in the quarter.
Depreciation and amortization were $831,000 for the quarter and
$2,088,000 for the first nine months below last year due to the
second quarter 1997 write-off of intangible assets within the
restructuring charge related to exiting the rail container
business, the fourth quarter 1997 special charge to recognize an
impairment in value of the Company's 48-foot temperature-
controlled trailers, and the replacement of certain owned
equipment with equipment leased under operating leases.   During
the first nine months of 1998, other expenses increased $468,000
over the same period last year as a result of increased expenses
related to advertising for and recruiting of drivers.  The
Company's equipment trade cycle resulted in a gain on the
disposition of revenue equipment of $798,000, an increase of
$689,000 over the same period in 1997.

     As a result of the foregoing, income from truckload
operations decreased by $1,309,000 for the third quarter of 1998
and increased $178,000 for the first nine months when compared to
the comparable periods of 1997.  Other income increased $881,000
during the first nine months of 1998 as compared to the same
period in 1997 primarily as a result of the sale of the corporate
office building during the first quarter of 1998.  The Company
realized a net gain on that disposition of $858,000.

     During 1997, the Company completed its plan to exit the rail
container operation.  A restructuring charge of $1,906,000 was
recorded in 1997 as a result of the decision.  Operating losses in
the rail operation were $809,000 in the first nine months of 1997.

     Net income for the third quarter of 1998 decreased $656,000
to $231,000 compared to the same period in 1997.  For the year,
net income increased $2,618,000 to $2,441,000 compared to the same
period in 1997.  Basic and diluted earnings (loss) per share
decreased from $.20 to $.05 in the third quarter of 1998 and
increased from $(.04) to $.56 in the first nine months compared to
the same period in 1997.

     The primary restraint on operating results in 1998 has been
recruitment and retention of drivers.  The restructured pay
package which went into effect during the quarter will raise
average base pay approximately 20% and total driver compensation
approximately 7%.  While the change in the pay package will
increase salary expense, management believes the expected
improvement in retention and experience level will, in time,
produce significant improvements in efficiency, operating costs,
and customer service.

Liquidity and Capital Resources

     KLLM Transport Services, Inc.'s primary sources of liquidity
are its cash flow from operations and its existing credit
agreements.  During the thirty-nine weeks ended October 2, 1998,
the Company generated $16.2 million in net cash from operating
activities.

     As a result of the Company's decision to consolidate the
corporate office and terminal operations, the sale of the
corporate office building was finalized in March 1998.  The sale
generated $3.2 million, thus, providing additional liquidity to
the Company.  During the first nine months of 1998, net capital
resources required by the Company were approximately $18 million
less than the same period last year.  The most significant change
from last year has been the decision to lease rather than purchase
certain revenue equipment.  Net capital expenditures for the
remainder of 1998, primarily for revenue equipment, are expected
to be approximately $2.7 million.  In addition to the equipment
leased during the third quarter, management expects to lease 150
temperature-controlled trailers through the remainder of 1998.

     The Company has a $50,000,000 unsecured revolving line of
credit with a syndication of banks.  Borrowings of $31,000,000
were outstanding at October 2, 1998.  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 1/5%  to 3/8% per annum are charged on the
unused portion of this line.  At October 2, 1998, the aggregate
principal amount of the Company's outstanding long-term
indebtedness was approximately $42.4 million.  Of this total
outstanding, $11.4 million was in the form of 9.5% senior notes
due June  2002 and $31.0 million consisted of the revolving line
of credit due April 2000.

     Working capital needs have generally been met from net cash
provided from operating activities.  The Company has $4,000,000 in
an unsecured working capital line of credit with a bank, all of
which was available at October 2, 1998.  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.

     In August 1998, the Company announced a stock repurchase plan
to purchase up to 200,000 shares of the Company's outstanding
stock.  During the quarter ended October 2, 1998, 50,000 shares
were repurchased for $468,000 with an additional 103,250 shares
repurchased for $862,000 subsequent to the end of the quarter.

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

Impact of Year 2000

     During 1998 the Company has progressed with modifications to
its computer software which will enable its computer systems to
function properly with respect to dates in the year 2000 and
thereafter.  The failure of the Company or its suppliers or its
customers to adequately prepare for the Year 2000 problem could
have an adverse affect on the consolidated financial position or
results of consolidated operations of the Company.

     Beginning in mid 1996, the Company established a conversion
timeline.  Each of the Company's information systems were
categorized as Year 2000 ready, not-ready and conversion planned,
and not-ready with replacement planned.  During the two years
since that study, the conversion effort and timeline has been
updated to reflect progress on the overall project.  Consistent
with the original Year 2000 conversion timeline, the project is
approximately seventy percent complete.  At present, management of
the Company believes that sufficient resources are in place to
complete the effort by mid-1999.  Upon completion of the effort,
detail testing, including actually changing the date to the year
2000 in certain systems, will be performed to ensure a seamless
passage into the year 2000.  The total project cost is estimated
at approximately $700,000 (excluding internal payroll costs) with
$400,000 capitalized for the purchase of new software, and the
remaining $300,000 expensed as incurred for the modification of
existing software.  Over the three-year-project, approximately 10%
of the information systems budget will be directed to year 2000
compliance.  Through the third quarter of 1998, approximately
$200,000 had been capitalized and $150,000 had been expensed.

     To determine the scope of the effort beyond the Company's
systems, each operating department of the Company is evaluating
the level of Year 2000 preparedness of significant suppliers and
customers.  These customers, vendors, and equipment manufacturers,
have indicated that they continue to assess the impact of the Year
2000 on their operations.

     In the event of an unforeseen problem, the Company is
developing contingency plans that may include communicating with
drivers other than via satellite and processing certain
transactions manually.  If certain suppliers such as fuel vendors
are unable to supply products or if customer locations are closed
due to their inability to operate, the Company's operations could
be suspended.  Although management has been assured that revenue
equipment will not be affected, a year 2000 electronic malfunction
could render certain pieces of equipment inoperable.  Management
believes it is unlikely that these uncertainties will occur.  The
Company's diverse customer base provides assurance that the
inability of a particular customer to operate, due to Year 2000
related problems, will not have a significant adverse impact on
the operations of the Company.

Factors Affecting Future Performance

     The Company's future operating results may be affected by
various trends and factors which are beyond the Company's control.
These include adverse changes in demand for trucking services,
availability of drivers and fuel prices.  Accordingly, past
performance should not be presumed to be an accurate indication of
future performance.

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.

PART II:  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K
         Exhibit 27 - Financial Data Schedule
         There were two Form 8-K filings for the quarter ended
         October 2, 1998.


SIGNATURES

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

<TABLE>
<S>                           <C>
                              KLLM TRANSPORT SERVICES, INC.
                              (Registrant)
Date   November 5, 1998
                              S/William J. Liles, III
                              ------------------------------                            William J. Liles,III
                              William J. Liles, III       
                              President and Chief Executive Officer
Date   November , 1998
       
                              S/ Steven L. Dutro
                              -------------------------------
                              Steven L. Dutro
                              Chief Financial Officer

</TABLE>

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
<TABLE>
<S>                           <C>
                               KLLM TRANSPORT SERVICES,INC.
                               (Registrant)
Date      November , 1998      /s/ William J. Liles, III
                               ------------------------------
                               William J. Liles,III
                               President and Chief
                               Executive Officer
Date      November , 1998
                               /s/ Steven L. Dutro
                               -------------------------------
                                Steven L. Dutro
                                Chief Financial
                                Officer








</TABLE>