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                  Commission File Number
    July 3, 1998                           0-14759
     



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


  Delaware                                      64-0412551  
(State or other jurisdiction of               (I.R.S. Employer
incorporation or organization)               Identification No.)



                       135 Riverview Drive
                     Richland, Mississippi            39218    
            (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      
                                               


      4,374,473 Common Shares were outstanding as of July 3, 1998.
  


                        KLLM TRANSPORT SERVICES, INC. 
                               AND SUBSIDIARIES
                                      
                                     
                                    INDEX
                                           

                                                                           
                                         	                   Page
                                                     	                      
                                    				            	       Number
                                                                            
          

    PART I.  FINANCIAL INFORMATION:

       Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets
         July 3, 1998 (Unaudited) and January 2, 1998          1

         Consolidated Statements of Earnings (Unaudited)
         Thirteen weeks and Twenty-six weeks ended July 3,
         1998 and July 4, 1997                                 2
                

         Condensed Consolidated Statements of Cash Flows
         (Unaudited)Twenty-six weeks ended July 3, 1998
         and July 4, 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               7





                  KLLM TRANSPORT SERVICES, INC
                        AND SUBSIDIARIES
              CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>

<S>                                       <C>     <C>

                                          July 3		January 2,
                                          1998		 	1998
                                         ---------		----------
                                        (Unaudited)  (Note)
                                           (In Thousands)
ASSETS

Current assets:
    
      Cash and cash equivalents			          $1,006		$  670
      Accounts receivable, net		           	21,019 	20,824
      Inventories - at cost				                613		   635
      Prepaid expenses:
          Tires						                        3,083		 2,885
          Other					                       	 1,524		 2,494
      Assets held for sale				               1,530		 3,383
      Deferred income taxes				              5,413		 5,413
                                    						---------		----------
               Total current assets	      		34,188		36,304

Property and equipment		            		     134,410 137,216
     Less accumulated depreciation 		      (32,025)(29,276)
                                   							---------	----------
                                           102,385 107,940

Intangible assets, net 		                			     0		    90

Other assets                          						   137		   201
                                    						---------		----------

                                          $136,710   $144,535
                                        ===========	 ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable and 
     accrued expenses                     	$14,188		$15,912
     Accrued claims expense				             14,831		 13,913
     Current maturities of long-term debt
       and capital leases				                7,021		  4,898
                                 								---------		----------
          Total current liabilities     			 36,040		 34,723
		

Long-term debt and capital leases, less
  current maturities	                  				 33,457		 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 - 4,374,473
 in 1998 and 4,373,155 in 1997		            4,559		  4,559
     Additional paid-in capital			         32,857		 32,854
     Retained earnings				               	 18,943		 16,733
                                       ----------		----------              
                                           56,359		 54,146
     Less Common Stock in Treasury,
     at cost, 184,281 shares
     in 1998 and 185,639 shares in 1997		 (2,021)		 (2,035)
                               								----------		----------
          Total stockholders' equity   		 54,338		 52,111
                                 						----------		----------
                                        $136,710  $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	Twenty-Six Weeks Ended
                                July 3	July 4	        July 3	July 4,
                                1998  		1997		        1998 		1997
                                --------------------	----------------------
                                   (In Thousands, Except Per Share Amounts)


OPERATING REVENUE FROM 
TRUCK LOAD OPERATIONS	         $60,113 	$62,593      	$119,303 	$123,211

OPERATING EXPENSES:
  Salaries, wages and
    fringe benefits		           18,081 	 19,050      	  37,837	  38,143
  Operating supplies
    and expenses			             14,514 	 15,418      	  28,845	  31,557
  Insurance, claims,
    taxes and licenses	       	  3,938 	  3,498	         7,188	   7,535
  Depreciation and
    amortization		            	  4,514 	  5,206      	   9,174	  10,431
  Purchased transportation
    and equipment rent		        13,431 	 13,899	        26,167	  26,829
  Other                    				  2,985 	  2,593      	   5,714	   5,269
  (Gain) loss on sale of
    revenue equipment		           (205)	    182	          (207)	    349
                          					--------------------	----------------------
  TOTAL OPERATING EXPENSES
  FROM TRUCK LOAD OPERATIONS    57,258 	 59,846      	 114,718	 120,113
                           				--------------------	----------------------


 OPERATING INCOME FROM
 TRUCK LOAD OPERATIONS	       	  2,855	  2,747	          4,585	   3,098

OPERATING REVENUE FROM 
RAIL CONTAINER OPERATIONS	          	0	  1,170	            	 0	   3,319
OPERATING EXPENSES		                	0	  1,928            		 0	   4,128
RESTRUCTURING CHARGE - Note C		      0	  1,906           	 	 0	   1,906
                           				--------------------	 ----------------------

 OPERATING INCOME (LOSS)
 FROM RAIL CONTAINER OPERATIONS	     0	 (2,664)           		 0	  (2,715)

Interest and other income	         (19)    (17)      	    (926)     (43)
Interest expense	            		    870	  1,059       	   1,826	   2,115
                          					--------------------	 ----------------------
                                   851	  1,042	            900	   2,072
                               -------------------- 	----------------------

EARNINGS (LOSS) BEFORE 
INCOME TAXES	                		  2,004	   (959)	         3,685	  (1,689)
Income taxes		                	    800	   (350)      	   1,475	    (625)
                         					--------------------	----------------------

NET EARNINGS (LOSS)          		 $1,204	  ($609)	        $2,210	 ($1,064)

BASIC AND DILUTED EARNINGS 
(LOSS) PER COMMON SHARE      		  $0.28	 ($0.14)      	   $0.51	  ($0.24)


</TABLE>

See accompanying notes.

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

<S>                                      <C>             <C>
                                        Twenty-Six Weeks Ended
                                        July 3	          July 4,
                                        1998           		1997
                                        ----------  -----------
                                          (In Thousands)


NET CASH PROVIDED BY OPERATING
     ACTIVITIES	                    		  	$10,241         	$9,885

CASH FLOWS FROM INVESTING
ACTIVITIES:
   Purchases of property and equipment 		 (5,673)	        (9,890)
   Proceeds from disposition of property,
   equipment and assets held for sale		    5,014	          4,208
                                  								---------  	-----------

NET CASH FLOWS USED IN INVESTING
      ACTIVITIES						                      (659)        	(5,682)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from exercise of stock options	   	0         	    99
   Net increase (decrease) in borrowings 
   under revolving line of credit     			 (6,000)	         2,000
   Repayment of long-term debt and capital
     leases				                       			 (3,246)        	(3,442)
   Net change in borrowings under working
     capital line of credit					               0	         (3,400)
                                   							---------  	-----------
NET CASH FLOWS USED IN
     FINANCING ACTIVITIES            				 (9,246)        	(4,743)
                                  								---------  	-----------
Net Increase (Decrease)in Cash and
     Cash Equivalents					                   336	           (540)
Cash and Cash Equivalents at Beginning
     Of Period						                         670         	 2,874
                                  								---------  	-----------
Cash and Cash Equivalents at End
     Of Period					                     	 $1,006         	$2,334
                                  								=========  	===========			


NONCASH FINANCING ACTIVITIES
   Common stock issued for services	   		   $17



</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 second 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.  The Company incurred no such
        costs in the first six months of 1998.
        
        
        NOTE B- FISCAL YEAR 
        
                 The Company has adopted a fiscal year-end
        on the Friday nearest December 31.  Accordingly, the
        second  quarter of 1998 ended on Friday, July 3,
        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 July 3, 1998,
        the Company had approximately 20.6% 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 second quarter of
        1998 decreased 4.0% from the comparable period of
        1997.  The decrease in operating revenue in the
        second quarter consisted of a 6.2% decrease from the
        Company's traditional over-the-road
        temperature-controlled freight services, net of a
        2.2% 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 $1.119 to
        $1.146 for the second quarter of 1998 as compared to
        the same period in 1997.  In 1997, fuel surcharges
        increased revenue slightly by $0.005 per mile.
        
                 For the year, operating revenue decreased
        3.2% from the first six 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. 
        
                 Although revenues declined slightly, the
        Company improved profitability.  The operating ratio
        improved from 95.6% to 95.3% for the second quarter 
        of 1998 compared to the same period in 1997.  During
        the first six months of 1998 the operating ratio
        improved from 97.5% in 1997 to 96.2%.
        
                 As a result of the aggressive cost control
        measures over the past several quarters, the Company
        has seen certain  items of expense remain below
        prior year levels.  Although average driver
        compensation rates have increased since the second
        quarter of 1997, fewer miles driven and reductions
        in nondriver compensation have resulted in a net
        decrease in salaries, wages, and benefits of
        $969,000 and $306,000 for the second quarter and
        first six months of 1998.  Operating supplies
        decreased $904,000 in the second quarter compared to
        the same period last year primarily due to lower
        fuel prices ($715,000) and cost control efforts. 
        For the year, insurance, claims, taxes and licenses
        are $347,000 below 1997; however, in the second
        quarter, these costs were $440,000 above the second
        quarter of 1997 primarily reflecting a higher number
        of claims in the quarter.   Depreciation and
        amortization was $692,000 for the quarter and
        $1,257,000 for the first six 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 and
        the fourth quarter 1997 special charge to recognize
        an impairment in value of the Company's 48-foot
        temperature-controlled trailers.   During the second
        quarter, other expenses increased $392,000 over the
        same period last year as a result of  increased
        expenses related to advertising for and recruiting
        of drivers.  In the second quarter of 1998, the
        Company recognized an improvement of $387,000 from
        gains and losses on the disposition of its revenue
        equipment as compared to the same period in 1997. 
        As a result of the foregoing, income from truckload
        operations increased by $108,000 or 3.9% for the
        second quarter of 1998 and $1,487,000 or 48.0% for
        the first six months when compared to the comparable
        period of 1997.  Other income increased $883,000
        during the first half 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 disposition of $858,000.
        
                 During the second quarter of 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 $758,000 in the second quarter and $809,000 in
        the first six months of 1997.
        
                 Net income for the second quarter of 1998
        of $1,204,000 is $1,813,000 greater than the same
        period in 1997, which was a net loss of $609,000. 
        For the year, net income increased $3,274,000 to
        $2,210,000 compared to the same period in 1997. 
        Basic and diluted earnings (loss) per share
        increased from $(.14) to $.28 in the second quarter
        of 1998 and increased from $(.24) to $.51 in the
        first six months compared to the same period in
        1997. 
        
                 The primary restraint on operating results
        in 1998 has been recruitment and retention of
        drivers.  Subsequent to the end of the quarter, the
        Company announced a significant restructuring of its
        driver compensation plan including provisions which
        will raise total driver compensation approximately
        7%.  Management believes the expected improvement in
        retention and experience level will, in time,
        produce significant improvements in efficiency and 
        cost.
        
       
        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 twenty-six weeks ended July 3, 1998, the
        Company generated $10.2 million in net cash provided
        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 half of
        1998, net capital resources required by the Company
        were approximately $5 million less than the same
        period last year or $.7 million.  The most
        significant changes from last year have been the
        timing of the delivery of new equipment.  Net
        capital expenditures for the remainder of 1998,
        primarily for revenue equipment, are expected to be
        approximately $4.6 million.  Additionally,
        management expects to lease 600
        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 $24,000,000 were outstanding
        at July 3, 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 July 3, 1998, the aggregate principal
        amount of the Company's outstanding long-term
        indebtedness was approximately $40.4 million.  Of
        this total outstanding, $1.2 million was in the form
        of 10.6% notes due July 15, 1998, $11.4 million in
        the form of 9.5% senior notes due June 15, 2002,
        $24.0 million consisted of the revolving line of
        credit due April 7, 1999, and $3.8 million principal
        related to capital leases with varying maturities.
        
                 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 July 3, 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.
                 
                 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.
        
        
        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 total project is estimated at
        approximately $700,000 for the purchase of new
        software and the modification of existing software. 
        The project is estimated to be completed no later
        than June 30, 1999, which is prior to any
        anticipated 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 no Form 8-K filings for the
        quarter ended July 3, 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.
        
        
        
                                		KLLM TRANSPORT SERVICES, INC.
                                                     
        (Registrant)       
        
<TABLE>

        <S>                               <C>
        Date   August 12, 1998                              
                                                            
                                    s/William J. Liles, III
                           							--------------------------
                                    William J. Liles,  III    
                                    President and Chief Executive Officer
        
        
        
        Date   August 12, 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.
        
        
        
        
                                   		KLLM TRANSPORT SERVICES,INC.
                                                     
        (Registrant)       
        
<TABLE>
       
       <S>                              <C>

       Date      August 12, 1998                           
                                        /s/William J. Liles, III                         
                                 							----------------------------
                                         William J. Liles,III    
                                         President and Chief
                                         Executive Officer
        
        
        
        Date      August 12, 1998                           
                                        /s/Steven L. Dutro                                
							                                  ---------------------------
                                         Steven L. Dutro    
                                         Chief Financial Officer
                                        
</TABLE>