----

----

FROZEN FOOD EXPRESSINDUSTRIES, INC.

| Texas(State      or other jurisdiction ofincorporation      or organization)                                   |   | 75-1301831(IRS      Employer Identification No.)                                       |
|----------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------|
|  1145      Empire Central PlaceDallas,      Texas 75247-4305(Address      of principal executive offices) |   |  (214)      630-8090(Registrant's      telephone number,including      area code) |

| Indicate      by check mark whether the registrant (l) has filed all reports required to      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934      during the preceding 12 months (or for such shorter period that the      registrant was required to file such reports), and (2) has been subject to      such filing requirements for the past 90 days.   ý      Yes     o  No |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  Large      accelerated filer   o | Accelerated      Filer   ý | Non-accelerated      filer   o | Smaller      Reporting Company   o |
|--------------------------------------------------|-------------------------------------------|------------------------------------------|----------------------------------------------|

|   | Class                              |   | Number      of Shares Outstanding     |   |
|--------|------------------------------------|--------|---------------------------------------|--------|
|   | Common      stock, $1.50 par value |   | 16,758,677      at September 30, 2008 |   |

----

INDEX

|         | PART      I  Financial Information                                                                                           | Page      No. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------|---------------|
|         |                                                                                                                              |          |
| Item      1  | Financial      Statements                                                                                                         |          |
|         | Consolidated      Condensed Balance SheetsSeptember      30, 2008 (unaudited) and December 31, 2007                               | 1             |
|         |                                                                                                                              |          |
|         | Consolidated      Condensed Statements of Profit and Loss (unaudited)Three      and nine months ended September 30, 2008 and 2007 | 2             |
|         |                                                                                                                              |          |
|         | Consolidated      Condensed Statements of Cash Flows (unaudited)Nine      months ended September 30, 2008 and 2007                | 3             |
|         |                                                                                                                              |          |
|         | Notes      to Consolidated Condensed Financial Statements (unaudited)                                                             | 4             |
|         |                                                                                                                              |          |
| Item      2  | Management's      Discussion and Analysis of Financial Condition and Results of      Operations                                   | 9             |
|         |                                                                                                                              |          |
| Item      3  | Quantitative      and Qualitative Disclosures about Market Risk                                                                   | 22            |
|         |                                                                                                                              |          |
| Item      4  | Controls      and Procedures                                                                                                      | 22            |
|         |                                                                                                                              |          |
|         | PART II   Other      Information                                                                                             |          |
|         |                                                                                                                              |          |
| Item      1  | Legal      Proceedings                                                                                                            | 22            |
|         |                                                                                                                              |          |
| Item      1A | Risk      Factors                                                                                                                 | 23            |
|         |                                                                                                                              |          |
| Item      2  | Unregistered      Sales of Equity Securities and Use of Proceeds                                                                  | 23            |
|         |                                                                                                                              |          |
| Item      3  | Defaults      Upon Senior Securities                                                                                              | 24            |
|         |                                                                                                                              |          |
| Item      4  | Submission      of Matters to a Vote of Security Holders                                                                          | 24            |
|         |                                                                                                                              |          |
| Item      5  | Other      Information                                                                                                            | 24            |
|         |                                                                                                                              |          |
| Item      6  | Exhibits                                                                                                                          | 24            |
|         |                                                                                                                              |          |
|         | Signatures                                                                                                                        | 25            |
|         |                                                                                                                              |          |
|         | Exhibit      Index                                                                                                                | 26            |

----

|                                                                |   | September      30,2008 |    |   | December 31,2007 |   |
|---------------------------------------------------------------------|--------|------------------------|---------|--------|-----------------------|--------|
| Assets                                                              |   |                   |    |   |                  |   |
| Current      assets                                                 |   |                   |    |   |                  |   |
| Cash      and cash equivalents                                      |   | $                      | 2,243   |   |                  | $      | 2,473 |   |
| Accounts      receivable, net                                       |   |                   | 62,942  |   |                  |   | 52,682 |   |
| Tires      on equipment in use, net                                 |   |                   | 5,210   |   |                  |   | 5,120 |   |
| Deferred      income taxes                                          |   |                   | 3,643   |   |                  |   | 2,978 |   |
| Other      current assets                                           |   |                   | 10,371  |   |                  |   | 14,607 |   |
| Total      current assets                                           |   |                   | 84,409  |   |                  |   | 77,860 |   |
|                                                                |   |                   |    |   |                  |   |   |   |
| Property      and equipment, net                                    |   |                   | 85,308  |   |                  |   | 90,309 |   |
| Other      assets                                                   |   |                   | 5,083   |   |                  |   | 5,500 |   |
| Total      assets                                                   |   | $                      | 174,800 |   |                  | $      | 173,669 |   |
| Liabilities      and shareholders' equity                           |   |                   |    |   |                  |   |   |   |
| Current      liabilities                                            |   |                   |    |   |                  |   |   |   |
| Accounts      payable                                               |   | $                      | 24,333  |   |                  | $      | 25,301 |   |
| Accrued      claims                                                 |   |                   | 11,291  |   |                  |   | 12,342 |   |
| Accrued      payroll and deferred compensation                      |   |                   | 6,755   |   |                  |   | 5,998 |   |
| Income      tax payable                                             |   |                   | 48      |   |                  |   | -- |   |
| Accrued      liabilities                                            |   |                   | 1,940   |   |                  |   | 1,964 |   |
| Total      current liabilities                                      |   |                   | 44,367  |   |                  |   | 45,605 |   |
|                                                                |   |                   |    |   |                  |   |   |   |
| Long-term      debt                                                 |   |                   | 5,800   |   |                  |   | -- |   |
| Deferred      income taxes                                          |   |                   | 12,975  |   |                  |   | 11,488 |   |
| Accrued      claims                                                 |   |                   | 4,492   |   |                  |   | 9,317 |   |
| Total      liabilities                                              |   |                   | 67,634  |   |                  |   | 66,410 |   |
|                                                                |   |                   |    |   |                  |   |   |   |
| Shareholders'      equity                                           |   |                   |    |   |                  |   |   |   |
| Par      value of common stock (18,572 shares issued)               |   |                   | 27,858  |   |                  |   | 27,858 |   |
| Paid      in capital                                                |   |                   | 5,424   |   |                  |   | 5,682 |   |
| Retained      earnings                                              |   |                   | 87,809  |   |                  |   | 88,515 |   |
|                                                                |   |                   | 121,091 |   |                  |   | 122,055 |   |
| Treasury      stock (1,814 and 1,921 shares, respectively), at cost |   |                   | (13,925 | )      |                  |   | (14,796 | ) |
| Total      shareholders' equity                                     |   |                   | 107,166 |   |                  |   | 107,259 |   |
| Total      liabilities and shareholders' equity                     |   | $                      | 174,800 |   |                  | $      | 173,669 |   |

 

----

|                                                |   | Three      Months |    |   | Nine      Months |   |
|-----------------------------------------------------|--------|-------------------|---------|--------|------------------|--------|
|                                                |   | 2008              |    |   | 2007             |   |   | 2008 |   |   | 2007 |   |
| Revenue                                             |   | $                 | 132,451 |   |             | $      | 114,730 |   |   | $ | 378,206 |   |   | $ | 334,288 |   |
| Operating      expenses                             |   |              |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Salaries,      wages and related expenses           |   |              | 33,693  |   |             |   | 31,893 |   |   |   | 96,524 |   |   |   | 97,101 |   |
| Purchased      transportation                       |   |              | 29,517  |   |             |   | 30,813 |   |   |   | 93,141 |   |   |   | 83,216 |   |
| Fuel                                                |   |              | 32,130  |   |             |   | 21,684 |   |   |   | 88,694 |   |   |   | 61,435 |   |
| Supplies      and expenses                          |   |              | 14,047  |   |             |   | 13,911 |   |   |   | 39,864 |   |   |   | 40,926 |   |
| Revenue      equipment rent                         |   |              | 9,005   |   |             |   | 7,640 |   |   |   | 25,734 |   |   |   | 22,885 |   |
| Depreciation                                        |   |              | 4,684   |   |             |   | 4,592 |   |   |   | 14,183 |   |   |   | 14,697 |   |
| Communications      and utilities                   |   |              | 1,410   |   |             |   | 1,169 |   |   |   | 3,636 |   |   |   | 3,213 |   |
| Claims      and insurance                           |   |              | 2,733   |   |             |   | 3,125 |   |   |   | 9,001 |   |   |   | 12,212 |   |
| Operating      taxes and licenses                   |   |              | 1,163   |   |             |   | 1,188 |   |   |   | 3,431 |   |   |   | 3,550 |   |
| Gains      on sale of operating assets              |   |              | (491    | )      |             |   | (799 | ) |   |   | (1,096 | ) |   |   | (2,331 | ) |
| Miscellaneous      expenses                         |   |              | 1,000   |   |             |   | 772 |   |   |   | 3,234 |   |   |   | 2,501 |   |
|        Total operating expenses                |   |              | 128,891 |   |             |   | 115,988 |   |   |   | 376,346 |   |   |   | 339,405 |   |
| Income      (loss) from operations                  |   |              | 3,560   |   |             |   | (1,258 | ) |   |   | 1,860 |   |   |   | (5,117 | ) |
| Non-operating      (income) expense                 |   |              |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Equity      in earnings of limited partnership |   |              | (200    | )      |             |   | (211 | ) |   |   | (511 | ) |   |   | (418 | ) |
| Interest      income                                |   |              | (12     | )      |             |   | (189 | ) |   |   | (66 | ) |   |   | (571 | ) |
| Interest      expense                               |   |              | 74      |   |             |   | -- |   |   |   | 110 |   |   |   | -- |   |
| Sale      of non-operating assets and other         |   |              | 200     |   |             |   | 163 |   |   |   | (108 | ) |   |   | 523 |   |
| Total      non-operating expense (income)           |   |              | 62      |   |             |   | (237 | ) |   |   | (575 | ) |   |   | (466 | ) |
| Pre-tax      income (loss)                          |   |              | 3,498   |   |             |   | (1,021 | ) |   |   | 2,435 |   |   |   | (4,651 | ) |
| Income      tax expense (benefit)                   |   |              | 2,141   |   |             |   | 2,214 |   |   |   | 1,629 |   |   |   | (522 | ) |
| Net      income (loss)                              |   | $                 | 1,357   |   |             | $      | (3,235 | ) |   | $ | 806 |   |   | $ | (4,129 | ) |
|                                                |   |              |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss) per share of common stock    |   |              |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                               |   | $                 | 0.08    |   |             | $      | (0.19 | ) |   | $ | 0.05 |   |   | $ | (0.24 | ) |
| Diluted                                             |   | $                 | 0.08    |   |             | $      | (0.19 | ) |   | $ | 0.05 |   |   | $ | (0.24 | ) |
| Weighted      average shares outstanding            |   |              |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                               |   |              | 16,737  |   |             |   | 17,293 |   |   |   | 16,699 |   |   |   | 17,335 |   |
| Diluted                                             |   |              | 17,027  |   |             |   | 17,293 |   |   |   | 16,998 |   |   |   | 17,335 |   |

----

|                                                          |   | 2008   |    |   | 2007   |   |
|---------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Net      cash provided by operating activities                |   | $      | 3,017   |   |   | $      | 8,884 |   |
|                                                          |   |   |    |   |   |   |   |   |
| Cash      flows from investing activities                     |   |   |    |   |   |   |   |   |
| Expenditures      for property and equipment                  |   |   | (19,006 | )      |   |   | (11,893 | ) |
| Proceeds      from sale of property and equipment             |   |   | 11,459  |   |   |   | 11,251 |   |
| Other                                                         |   |   | (252    | )      |   |   | (14 | ) |
| Net      cash used in investing activities          |   |   | (7,799  | )      |   |   | (656 | ) |
|                                                          |   |   |    |   |   |   |   |   |
| Cash      flows from financing activities                     |   |   |    |   |   |   |   |   |
| Proceeds      from borrowings                                 |   |   | 68,000  |   |   |   | 200 |   |
| Payments      against borrowings                              |   |   | (62,200 | )      |   |   | (5,100 | ) |
| Dividends      paid                                           |   |   | (1,512  | )      |   |   | (1,571 | ) |
| Income      tax benefit of stock options and restricted stock |   |   | 56      |   |   |   | 420 |   |
| Proceeds      from capital stock transactions                 |   |   | 424     |   |   |   | 1,366 |   |
| Purchases      of treasury stock                    |   |   | (216    | )      |   |   | (4,482 | ) |
| Net      cash provided by (used in) financing activities      |   |   | 4,552   |   |   |   | (9,167 | ) |
|                                                          |   |   |    |   |   |   |   |   |
| Net      decrease in cash and cash equivalents                |   |   | (230    | )      |   |   | (939 | ) |
| Cash      and cash equivalents at January 1                   |   |   | 2,473   |   |   |   | 9,589 |   |
| Cash      and cash equivalents at September 30                |   | $      | 2,243   |   |   | $      | 8,650 |   |

----

FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES

|                                 |   | September      30, 2008 |   |   | December      31, 2007 |   |
|--------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|
| Due      from equipment sales        |   | $                       | 0.5    |   |                   | $      | 0.7 |   |
| Income      taxes receivable         |   |                    | --     |   |                   |   | 4.1 |   |
| Other      prepaid taxes             |   |                    | 1.6    |   |                   |   | 1.2 |   |
| Prepaid      insurance               |   |                    | 1.6    |   |                   |   | 1.6 |   |
| Prepaid      rent                    |   |                    | 2.0    |   |                   |   | 1.8 |   |
| Retired      equipment held for sale |   |                    | --     |   |                   |   | 1.5 |   |
| Prepaid      licenses and permits    |   |                    | 2.4    |   |                   |   | 1.6 |   |
| Inventories      and other           |   |                    | 2.3    |   |                   |   | 2.1 |   |
|                                 |   | $                       | 10.4   |   |                   | $      | 14.6 |   |

----

For interim periods, US GAAP requires that weproject full-year income and permanent differences between book income andtaxable income in order to calculate an effective tax rate for the fullyear.  That projected effective tax rate is used to calculate ourincome tax provision or benefit for the interim periods’ year-to-date financialresults.

----

|                                         |   | Three      Months |   |   | Nine      Months |   |
|----------------------------------------------|--------|-------------------|--------|--------|------------------|--------|
| Weighted      average number of:             |   | 2008              |   |   | 2007             |   |   | 2008 |   |   | 2007 |   |
| Basic      shares                            |   |              | 16,737 |   |             |   | 17,293 |   |   |   | 16,699 |   |   |   | 17,335 |   |
| Common      stock equivalents                |   |              | 290    |   |             |   | -- |   |   |   | 299 |   |   |   | -- |   |
| Diluted      shares                          |   |              | 17,027 |   |             |   | 17,293 |   |   |   | 16,998 |   |   |   | 17,335 |   |
|                                         |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Anti-dilutive      shares excluded due to:   |   | 2008              |   |   | 2007             |   |   | 2008 |   |   | 2007 |   |
| Exercise      price of stock options         |   |              | 739    |   |             |   | 580 |   |   |   | 553 |   |   |   | 647 |   |
| Net      loss                                |   |              | --     |   |             |   | 373 |   |   |   | -- |   |   |   | 416 |   |
| Total      excluded common stock equivalents |   |              | 739    |   |             |   | 953 |   |   |   | 553 |   |   |   | 1,063 |   |

----

Beginning January 2008, we adopted two new accountingpronouncements:  

| ·   | Statement      of Financial Accounting Standards No. 157, Fair Value Measurements      (“SFAS 157”).  This statement establishes a framework for      measuring fair value in US GAAP and expands disclosures about fair value      measurements.  In February 2008, the FASB issued FASB Staff Position      ("FSP") FAS 157-2,  Effective Date of FASB      Statement No. 157, to provide a one-year deferral of the effective      date of SFAS 157 for nonfinancial assets and nonfinancial liabilities,      except those that are recognized or disclosed in financial statements at      fair value on a recurring basis (that is, at least annually).  For      nonfinancial assets and nonfinancial liabilities subject to the deferral,      the effective date of SFAS 157 is postponed to fiscal years beginning      after November 15, 2008.  The adoption of this statement did not have      a significant effect on our consolidated financial    statements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Statement      of Financial Accounting Standards No. 159, The Fair Value Option for      Financial Assets and Financial Liabilities,  including an      amendment of FASB Statement No. 115   (“SFAS 159”).       SFAS 159 provides companies with an option to report selected financial      assets and financial liabilities at fair value, which can be elected on an      instrument-by-instrument basis. Unrealized gains and losses on items for      which the fair value option has been elected are reported in earnings at      each subsequent reporting date. The adoption of this statement did not      have a significant effect on our consolidated financial      statements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On      October 10, 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of      a Financial Asset When the Market for that Asset is not Active,      which provides guidance on how to value financial assets subject to      inactive markets. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      December 2007, the FASB issued Statement of Financial Accounting      Standards No. 141 (revised 2007), Business Combinations      (“SFAS 141R”), which replaces FASB Statement No. 141, Business Combinations (as      amended).  SFAS 141R retains the fundamental requirements in      SFAS 141 that the acquisition method of accounting (which SFAS 141 called      the purchase method) be used for all business combinations and for an      acquirer to be identified for each business combination.  SFAS      141R also establishes principles and requirements for how an acquirer      recognizes and measures in its financial statements the identifiable      assets acquired, the liabilities assumed, any non-controlling interest in      the acquiree and the goodwill acquired.  SFAS 141R also establishes      disclosure requirements which will enable users of the financial      statements to evaluate the nature and financial effects of the business      combination, measures contingent consideration at the acquisition-date      fair value and requires transaction costs to be recognized as expense in      the period in which they areincurred.  |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      December 2007, the FASB issued Statement of Financial Accounting      Standards No. 160, Noncontrolling Interests in      Consolidated Financial Statements – an amendment of ARB No. 51      Consolidated Financial Statements (as amended) (“SFAS 160”).       SFAS 160 requires that accounting and reporting for noncontrolling      (minority) interests will be recharacterized as noncontrolling interests      and classified as a component of equity.  SFAS 160 also establishes      reporting requirements that provide sufficient disclosures that clearly      identify and distinguish between the interests of the parent and the      interests of the noncontrolling owners.  SFAS 160 applies to all      entities that prepare consolidated financial statements, except      not-for-profit organizations, but will affect only those entities that      have an outstanding noncontrolling interest in one or more subsidiaries or      that deconsolidate a subsidiary.  This statement is effective as of      the beginning of an entity’s first fiscal year that begins after      December 15, 2008.  All of our subsidiaries are wholly-owned by      us. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      March 2008, the FASB issued Statement of Financial Accounting Standards      No. 161, Disclosures      about Derivative Instruments and Hedging Activities – an amendment to FASB      Statement No. 133 (“SFAS No. 161”). SFAS No. 161 is      intended to improve financial standards for derivative instruments and      hedging activities by requiring enhanced disclosures to enable investors      to better understand their effects on an entity's financial position,      financial performance, and cash flows. Entities are required to provide      enhanced disclosures about: (a) how and why an entity uses derivative      instruments; (b) how derivative instruments and related hedged items are      accounted for under Statement 133 and its related interpretations; and (c)      how derivative instruments and related hedged items affect an entity’s      financial position, financial performance, and cash flows. It is effective      for financial statements issued for fiscal years beginning after November      15, 2008, with early adoption encouraged.  We presently have no      derivative instruments or hedgingactivities. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | In      April 2008, FSB issued FASB Staff Position (“FSP”) FAS 142-3, Determination of the Useful      Life of Intangible Assets (“FSP 142-3”).  FSP 142-3      amends the factors an entity should consider in developing renewal or      extension assumptions used in determining the useful life of recognized      intangible assets under FASB Statement No. 142, Goodwill and Other Intangible      Assets.  This new guidance applies prospectively to      intangible assets that are acquired individually or with a group of other      assets in business combinations and asset  acquisitions. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      May 2008, the FASB issued Statement of Financial Accounting Standards No.      162, The Hierarchy of      Generally Accepted Accounting Principles (“SFAS No. 162”).      SFAS No. 162 provides a consistent framework for determining what      accounting principles should be used when preparing US GAAP financial      statements. Previous guidance did not properly rank the accounting      literature. The new standard is effective 60 days following the SEC’s      approval of the Public Company Accounting Oversight Board amendments to AU      Section 411, The Meaning      of Present Fairly in Conformity With Generally Accepted Accounting      Principles. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether      Instruments Granted in Share-Based Payment Transactions Are Participating      Securities, to clarify that all outstanding unvested share-based      payment awards that contain nonforfeitable rights to dividends or dividend      equivalents, whether paid or unpaid, are participating securities. An      entity must include participating securities in its calculation of basic      and diluted earnings per share (“EPS”) pursuant to the two-class method,      as described in FASB Statement 128, Earnings per Share. FSP      EITF 03-6-1 is effective for fiscal years beginning after December 15,      2008. We intend to adopt FSP EITF 03-6-1 effective January 1, 2009 and      apply its provisions retrospectively to all prior-period EPS data      presented in our financial statements.  We have periodically issued      share-based payment awards that contain nonforfeitable rights to dividends      and are in the process of evaluating the impact that the adoption of FSP      EITF 03-6-1 will have on our consolidated financial      statements. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

  

Revenue:Our revenue is derived from five types of transactions: 

| - | Truckload                                    |
|---|----------------------------------------------|
| - | Less-than-Truckload      (“LTL”) |
| - | Dedicated      Fleet                         |
| - | Brokerage      and Logistics                 |
| - | Equipment      Rental                        |

----

           Thefollowing table summarizes and compares the significant components of revenueand other information regarding our business for each of the three- andnine-month periods ended September 30, 2008 and 2007:  

|                                            |   | Three      Months |   |   | Nine      Months |   |
|-------------------------------------------------|--------|-------------------|--------|--------|------------------|--------|
|                                            |   | 2008              |   |   | 2007             |   |   | 2008 |   |   | 2007 |   |
| Revenue      from: (a)                          |   |              |   |   |             |   |   |   |   |   |   |   |
| Temperature-controlled      fleet               |   | $                 | 37.7   |   |             | $      | 34.5 |   |   | $ | 108.9 |   |   | $ | 103.2 |   |
| Dry-freight      fleet                          |   |              | 16.9   |   |             |   | 18.0 |   |   |   | 53.1 |   |   |   | 55.8 |   |
| Total      truckload linehaul services          |   |              | 54.6   |   |             |   | 52.5 |   |   |   | 162.0 |   |   |   | 159.0 |   |
| Dedicated      fleets                           |   |              | 6.8    |   |             |   | 3.7 |   |   |   | 18.5 |   |   |   | 12.1 |   |
| Total      truckload revenue                    |   |              | 61.4   |   |             |   | 56.2 |   |   |   | 180.5 |   |   |   | 171.1 |   |
| LTL      linehaul services                      |   |              | 32.9   |   |             |   | 33.9 |   |   |   | 92.9 |   |   |   | 96.2 |   |
| Total      linehaul and dedicated revenue  |   |              | 94.3   |   |             |   | 90.1 |   |   |   | 273.4 |   |   |   | 267.3 |   |
| Fuel      surcharges                            |   |              | 33.8   |   |             |   | 18.7 |   |   |   | 90.1 |   |   |   | 51.5 |   |
| Brokerage                                       |   |              | 3.1    |   |             |   | 4.4 |   |   |   | 10.6 |   |   |   | 11.5 |   |
| Equipment      rental                 |   |              | 1.3    |   |             |   | 1.5 |   |   |   | 4.1 |   |   |   | 4.0 |   |
| Total      revenue                              |   |              | 132.5  |   |             |   | 114.7 |   |   |   | 378.2 |   |   |   | 334.3 |   |
| Operating      expenses (a)                     |   |              | 128.9  |   |             |   | 116.0 |   |   |   | 376.3 |   |   |   | 339.4 |   |
| Income      (loss) from operations (a)          |   | $                 | 3.6    |   |             | $      | (1.3 | ) |   | $ | 1.9 |   |   | $ | (5.1 | ) |
| Operating      ratio (b)                        |   |              | 97.3   | %      |             |   | 101.1 | % |   |   | 99.5 | % |   |   | 101.5 | % |
| Weekly      average trucks in service           |   |              | 2,011  |   |             |   | 2,097 |   |   |   | 2,029 |   |   |   | 2,136 |   |
| Revenue      per truck per week (c)             |   | $                 | 3,568  |   |             | $      | 3,269 |   |   | $ | 3,442 |   |   | $ | 3,209 |   |

| Computational      notes: |
|---------------------------|
| (a)                       | Revenue      and expense amounts are stated in millions of dollars.  The amounts      presented in the table may not agree to the amounts shown in the      accompanying consolidated condensed statements of profit and loss due to      rounding. |
| (b)                       | Operating      expenses divided by total revenue. |
| (c)                       | Average      weekly linehaul and dedicated revenue divided by weekly average trucks in      service. |

|                                                                |   |   | Three      Months |   |   |   | Nine Months |   |
|---------------------------------------------------------------------|--------|--------|-------------------|--------|--------|--------|------------------|--------|
| Truckload                                                           |   |   | 2008              |   |   |   | 2007             |   |   |   | 2008 |   |   |   | 2007 |   |
|     Total      linehaul miles (a)               |   |   | 40.7              |   |   |   | 40.1             |   |   |   | 123.1 |   |   |   | 122.2 |   |
|     Loaded      miles (a)                       |   |   | 36.9              |   |   |   | 36.1             |   |   |   | 112.0 |   |   |   | 110.1 |   |
|     Empty      mile ratio (b)                   |   |   | 9.4               | %      |   |   | 9.8              | %      |   |   | 9.0 | % |   |   | 9.9 | % |
|     Linehaul      revenue per total mile (c)    |   | $      | 1.34              |   |   | $      | 1.31             |   |   | $ | 1.32 |   |   | $ | 1.30 |   |
|     Linehaul      revenue per loaded mile (d)   |   | $      | 1.48              |   |   | $      | 1.45             |   |   | $ | 1.45 |   |   | $ | 1.44 |   |
|     Linehaul      shipments (e)                 |   |   | 39.0              |   |   |   | 36.6             |   |   |   | 115.1 |   |   |   | 116.0 |   |
|     Loaded      miles per shipment (f)          |   |   | 946               |   |   |   | 987              |   |   |   | 973 |   |   |   | 949 |   |
| LTL                                                                 |   |   |              |   |   |   |             |   |   |   |   |   |   |   |   |   |
|     Hundredweight      (e)                      |   |   | 2,190             |   |   |   | 2,225            |   |   |   | 6,397 |   |   |   | 6,438 |   |
|     Shipments      (e)                          |   |   | 71.9              |   |   |   | 72.9             |   |   |   | 205.4 |   |   |   | 208.1 |   |
|     Linehaul      revenue per hundredweight (g) |   | $      | 15.04             |   |   | $      | 15.24            |   |   | $ | 14.53 |   |   | $ | 14.95 |   |
|     Linehaul      revenue per shipment (h)      |   | $      | 458               |   |   | $      | 466              |   |   | $ | 453 |   |   | $ | 462 |   |
|     Average      weight per shipment (i)        |   |   | 3,046             |   |   |   | 3,054            |   |   |   | 3,115 |   |   |   | 3,093 |   |

| Computational      notes: |
|---------------------------|
| (a)                       | In      millions. |
| (b)                       | Total      linehaul miles minus loaded miles, divided by total linehaul      miles. |
| (c)                       | Revenue      from linehaul services divided by total linehaul miles. |
| (d)                       | Revenue      from linehaul services divided by loaded miles. |
| (e)                       | In      thousands. |
| (f)                       | Total      loaded miles divided by number of linehaul shipments. |
| (g)                       | LTL      revenue divided by LTL hundredweight. |
| (h)                       | LTL      revenue divided by number of LTL shipments. |
| (i)                       | LTL      hundredweight times one hundred, divided by number of LTL      shipments.  |

----

----

|                                         |   | Three      Months |   |   | Nine      Months |   |
|----------------------------------------------|--------|-------------------|--------|--------|------------------|--------|
| Operating      Expenses Incurred for         |   | 2008              |   |   | 2007             |   |   | 2008 |   |   | 2007 |   |
| Salaries,      wages and related expenses    |   |              | 25.4   | %      |             |   | 27.8 | % |   |   | 25.5 | % |   |   | 29.0 | % |
| Purchased      transportation                |   |              | 22.3   |   |             |   | 26.9 |   |   |   | 24.6 |   |   |   | 24.9 |   |
| Fuel                                         |   |              | 24.3   |   |             |   | 18.9 |   |   |   | 23.5 |   |   |   | 18.4 |   |
| Supplies      and expenses                   |   |              | 10.6   |   |             |   | 12.1 |   |   |   | 10.5 |   |   |   | 12.2 |   |
| Revenue      equipment rent and depreciation |   |              | 10.3   |   |             |   | 10.7 |   |   |   | 10.6 |   |   |   | 11.2 |   |
| Claims      and insurance                    |   |              | 2.1    |   |             |   | 2.7 |   |   |   | 2.4 |   |   |   | 3.7 |   |
| Other                                        |   |              | 2.3    |   |             |   | 2.0 |   |   |   | 2.4 |   |   |   | 2.1 |   |
| Total      operating expenses                |   |              | 97.3   | %      |             |   | 101.1 | % |   |   | 99.5 | % |   |   | 101.5 | % |

----

|                                                             |   | Three      Months |   |   | Nine      Months |   |
|------------------------------------------------------------------|--------|-------------------|--------|--------|------------------|--------|
| Amount      of Salaries, Wages and Related Expenses Incurred for |   | 2008              |   |   | 2007             |   |   | 2008 |   |   | 2007 |   |
| Employee-driver      wages and per-diem expenses                 |   | $                 | 19.5   |   |             | $      | 17.7 |   |   | $ | 55.4 |   |   | $ | 54.4 |   |
| Non-driver      salaries                                         |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
|      Motor-carrier      operations      |   |              | 9.6    |   |             |   | 8.3 |   |   |   | 27.3 |   |   |   | 27.2 |   |
|      Logistics      and brokerage       |   |              | 0.5    |   |             |   | 0.4 |   |   |   | 1.7 |   |   |   | 0.8 |   |
|      Severance      pay                 |   |              | --     |   |             |   | 0.1 |   |   |   | 0.2 |   |   |   | 1.0 |   |
| Payroll      taxes                                               |   |              | 2.1    |   |             |   | 1.9 |   |   |   | 6.3 |   |   |   | 6.3 |   |
| Work-related      injuries                                       |   |              | 0.9    |   |             |   | 1.3 |   |   |   | 2.6 |   |   |   | 3.1 |   |
| Health      insurance and other                                  |   |              | 1.1    |   |             |   | 2.2 |   |   |   | 3.0 |   |   |   | 4.3 |   |
|                                                             |   | $                 | 33.7   |   |             | $      | 31.9 |   |   | $ | 96.5 |   |   | $ | 97.1 |   |

----

|                                                         |   | Three      Months |   |   | Nine      Months |   |
|--------------------------------------------------------------|--------|-------------------|--------|--------|------------------|--------|
| Amount      of Purchased Transportation Expense Incurred for |   | 2008              |   |   | 2007             |   |   | 2008 |   |   | 2007 |   |
| Truckload      linehaul service                              |   | $                 | 6.2    |   |             | $      | 10.6 |   |   | $ | 22.3 |   |   | $ | 30.3 |   |
| LTL      linehaul service                                    |   |              | 8.2    |   |             |   | 9.0 |   |   |   | 24.5 |   |   |   | 25.6 |   |
| Intermodal                                                   |   |              | 5.8    |   |             |   | 2.9 |   |   |   | 15.7 |   |   |   | 5.3 |   |
| Total      linehaul service                                  |   |              | 20.2   |   |             |   | 22.5 |   |   |   | 62.5 |   |   |   | 61.2 |   |
| Fuel      surcharges                                         |   |              | 6.7    |   |             |   | 4.6 |   |   |   | 21.7 |   |   |   | 12.5 |   |
| Brokerage      and other                                     |   |              | 2.6    |   |             |   | 3.7 |   |   |   | 8.9 |   |   |   | 9.5 |   |
|                                                         |   | $                 | 29.5   |   |             | $      | 30.8 |   |   | $ | 93.1 |   |   | $ | 83.2 |   |

----

Fuel: Fuelexpense increased by $10.4 million (48.2%) and by $27.3 million (44.4%)during the three- and nine-month periods ended September 30, 2008, respectively,as compared to the same periods of 2007, and increased as a percentage ofrevenue from 24.1% to 34.0% for the third quarter and from 23.0% to 32.4% forthe year-to-date performance in 2007 and 2008, respectively. The following tablesummarizes and compares the relationship between fuel expense and total linehauland dedicated fleet revenue during each of the three- and nine-month periodsended September 30, 2008 and 2007 (in millions):

|                                                                              | Three      Months |   | Nine Months |   |
|-----------------------------------------------------------------------------------|-------------------|--------|------------------|--------|
|                                                                              | 2008              |   | 2007             |   | 2008 |   | 2007 |   |
| Total      linehaul and dedicated fleet revenue                                   |              | $      | 94.3             |   |   | $ | 90.1 |   |   | $ | 273.4 |   |   | $ | 267.3 |   |
| Fuel      expense                                                                 |              | $      | 32.1             |   |   | $ | 21.7 |   |   | $ | 88.7 |   |   | $ | 61.4 |   |
| Fuel      expense as a percent of total linehaul and dedicated fleet      revenue |              |   | 34.0             | %      |   |   | 24.1 | % |   |   | 32.4 | % |   |   | 23.0 | % |

----

|                                              |   | Three      Months |   |   | Nine      Months |   |
|---------------------------------------------------|--------|-------------------|--------|--------|------------------|--------|
| Amount      of Supplies and Expenses Incurred for |   | 2008              |   |   | 2007             |   |   | 2008 |   |   | 2007 |   |
| Fleet      repairs and maintenance                |   | $                 | 4.2    |   |             | $      | 3.9 |   |   | $ | 12.3 |   |   | $ | 11.8 |   |
| Freight      handling                             |   |              | 2.7    |   |             |   | 3.3 |   |   |   | 8.3 |   |   |   | 9.0 |   |
| Driver      travel expenses                       |   |              | 0.9    |   |             |   | 0.8 |   |   |   | 2.5 |   |   |   | 2.1 |   |
| Tires                                             |   |              | 1.4    |   |             |   | 0.9 |   |   |   | 4.0 |   |   |   | 3.7 |   |
| Terminal      and warehouse expenses              |   |              | 1.6    |   |             |   | 1.6 |   |   |   | 4.6 |   |   |   | 4.6 |   |
| Driver      recruiting                            |   |              | 1.0    |   |             |   | 1.4 |   |   |   | 2.7 |   |   |   | 4.2 |   |
| Other                                             |   |              | 2.3    |   |             |   | 2.0 |   |   |   | 5.5 |   |   |   | 5.5 |   |
|                                              |   | $                 | 14.1   |   |             | $      | 13.9 |   |   | $ | 39.9 |   |   | $ | 40.9 |   |

|                                           |   | Three      Months |   |   | Nine      Months |   |
|------------------------------------------------|--------|-------------------|--------|--------|------------------|--------|
| Claims      and Insurance Expense Incurred for |   | 2008              |   |   | 2007             |   |   | 2008 |   |   | 2007 |   |
| Liability                                      |   | $                 | 2.1    |   |             | $      | 1.3 |   |   | $ | 6.7 |   |   | $ | 7.5 |   |
| Cargo                                          |   |              | 0.5    |   |             |   | 0.9 |   |   |   | 0.9 |   |   |   | 2.3 |   |
| Physical      damage, property and other       |   |              | 0.1    |   |             |   | 0.9 |   |   |   | 1.4 |   |   |   | 2.4 |   |
|                                           |   | $                 | 2.7    |   |             | $      | 3.1 |   |   | $ | 9.0 |   |   | $ | 12.2 |   |

----

Under our current policies for liability incidents, we retain allof the risk for losses up to $4 million for each occurrence. Losses between $4million and $10 million are shared 25% by us and 75% by theinsurers.  We are fully insured for losses for each occurrence between$10 million and $50 million. Our existing policies for liability insuranceextend through June 1, 2009.  We are monitoring closely the potentialimpacts on insurance premiums and coverages created by the current nationaleconomic situation. 

----

----

 CONTRACTUALOBLIGATIONS

| Payments      Due by Year                 |   | Total  |   |   | 2008   | (1)    |       |   | 2009-2010 |   |       |   | 2011-2012 |   |       | After      2012 |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|------------|--------|-----------|--------|------------|--------|-----------|--------|------------|-----------------|--------|
| Long-term      debt and letters of credit |   | $      | 11.4   |   |   | $      | --         |   |      | $      | 11.4       |   |      | $      | --         |            |   | $ | -- |   |
| Purchase      obligations                 |   |   | 26.2   |   |   |   | 26.2       |   |      |   | --         |   |      |   | --         |            |   |   | -- |   |
| Operating      leases for                 |   |   |   |   |   |   |       |   |      |   |       |   |      |   |       |            |   |   |   |   |
| Rentals                                   |   |   | 85.3   |   |   |   | 8.7        |   |      |   | 49.8       |   |      |   | 19.0       |            |   |   | 7.8 |   |
| Residual      guarantees                  |   |   | 5.2    |   |   |   | 0.5        |   |      |   | 2.6        |   |      |   | 2.1        |            |   |   | -- |   |
|      Total       |   | $      | 128.1  |   |   | $      | 35.4  |   |      | $      | 63.8  |   |      | $      | 21.1  |            |   | $ | 7.8  |   |

| (1)  | Represents      amounts due between October 1, 2008 and December 31,  2008. |
|-----------|-----------------------------------------------------------------------------|

As of September 30, 2008, we hadnon-cancellable contracts to purchase tractors and trailers totaling $26.2million during 2008.  We expect to lease many of these assets whenthey are placed into service.

----

| ·   | Statement      of Financial Accounting Standards No. 157, Fair Value Measurements      (“SFAS 157”).  This statement establishes a framework for      measuring fair value in US GAAP and expands disclosures about fair value      measurements.  In February 2008, the FASB issued FASB Staff Position      ("FSP") FAS 157-2,  Effective Date of FASB      Statement No. 157, to provide a one-year deferral of the effective      date of SFAS 157 for nonfinancial assets and nonfinancial liabilities,      except those that are recognized or disclosed in financial statements at      fair value on a recurring basis (that is, at least annually).  For      nonfinancial assets and nonfinancial liabilities subject to the deferral,      the effective date of SFAS 157 is postponed to fiscal years beginning      after November 15, 2008.  The adoption of this statement did not have      a significant effect on our consolidated financial    statements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Statement      of Financial Accounting Standards No. 159, The Fair Value Option for      Financial Assets and Financial Liabilities,  including an      amendment of FASB Statement No. 115   (“SFAS 159”).       SFAS 159 provides companies with an option to report selected financial      assets and financial liabilities at fair value, which can be elected on an      instrument-by-instrument basis. Unrealized gains and losses on items for      which the fair value option has been elected are reported in earnings at      each subsequent reporting date. The adoption of this statement did not      have a significant effect on our consolidated financial      statements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On      October 10, 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of      a Financial Asset When the Market for that Asset is not Active,      which provides guidance on how to value financial assets subject to      inactive markets. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      December 2007, the FASB issued Statement of Financial Accounting      Standards No. 141 (revised 2007), Business Combinations      (“SFAS 141R”), which replaces FASB Statement No. 141, Business Combinations (as      amended).  SFAS 141R retains the fundamental requirements in      SFAS 141 that the acquisition method of accounting (which SFAS 141 called      the purchase method) be used for all business combinations and for an      acquirer to be identified for each business combination.  SFAS      141R also establishes principles and requirements for how an acquirer      recognizes and measures in its financial statements the identifiable      assets acquired, the liabilities assumed, any non-controlling interest in      the acquiree and the goodwill acquired.  SFAS 141R also establishes      disclosure requirements which will enable users of the financial      statements to evaluate the nature and financial effects of the business      combination, measures contingent consideration at the acquisition-date      fair value and requires transaction costs to be recognized as expense in      the period in which they areincurred.  |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      December 2007, the FASB issued Statement of Financial Accounting      Standards No. 160, Noncontrolling Interests in      Consolidated Financial Statements – an amendment of ARB No. 51      Consolidated Financial Statements (as amended) (“SFAS 160”).       SFAS 160 requires that accounting and reporting for noncontrolling      (minority) interests will be recharacterized as noncontrolling interests      and classified as a component of equity.  SFAS 160 also establishes      reporting requirements that provide sufficient disclosures that clearly      identify and distinguish between the interests of the parent and the      interests of the noncontrolling owners.  SFAS 160 applies to all      entities that prepare consolidated financial statements, except      not-for-profit organizations, but will affect only those entities that      have an outstanding noncontrolling interest in one or more subsidiaries or      that deconsolidate a subsidiary.  This statement is effective as of      the beginning of an entity’s first fiscal year that begins after      December 15, 2008.  All of our subsidiaries are wholly-owned by      us. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      March 2008, the FASB issued Statement of Financial Accounting Standards      No. 161, Disclosures      about Derivative Instruments and Hedging Activities – an amendment to FASB      Statement No. 133 (“SFAS No. 161”). SFAS No. 161 is      intended to improve financial standards for derivative instruments and      hedging activities by requiring enhanced disclosures to enable investors      to better understand their effects on an entity's financial position,      financial performance, and cash flows. Entities are required to provide      enhanced disclosures about: (a) how and why an entity uses derivative      instruments; (b) how derivative instruments and related hedged items are      accounted for under Statement 133 and its related interpretations; and (c)      how derivative instruments and related hedged items affect an entity’s      financial position, financial performance, and cash flows. It is effective      for financial statements issued for fiscal years beginning after November      15, 2008, with early adoption encouraged.  We presently have no      derivative instruments or hedgingactivities. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      April 2008, FSB issued FASB Staff Position (“FSP”) FAS 142-3, Determination of the Useful      Life of Intangible Assets (“FSP 142-3”).  FSP 142-3      amends the factors an entity should consider in developing renewal or      extension assumptions used in determining the useful life of recognized      intangible assets under FASB Statement No. 142, Goodwill and Other Intangible      Assets.  This new guidance applies prospectively to      intangible assets that are acquired individually or with a group of other      assets in business combinations and asset  acquisitions. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | In      May 2008, the FASB issued Statement of Financial Accounting Standards No.      162, The Hierarchy of      Generally Accepted Accounting Principles (“SFAS No. 162”).      SFAS No. 162 provides a consistent framework for determining what      accounting principles should be used when preparing US GAAP financial      statements. Previous guidance did not properly rank the accounting      literature. The new standard is effective 60 days following the SEC’s      approval of the Public Company Accounting Oversight Board amendments to AU      Section 411, The Meaning      of Present Fairly in Conformity With Generally Accepted Accounting      Principles. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether      Instruments Granted in Share-Based Payment Transactions Are Participating      Securities, to clarify that all outstanding unvested share-based      payment awards that contain nonforfeitable rights to dividends or dividend      equivalents, whether paid or unpaid, are participating securities. An      entity must include participating securities in its calculation of basic      and diluted earnings per share (“EPS”) pursuant to the two-class method,      as described in FASB Statement 128, Earnings per Share. FSP      EITF 03-6-1 is effective for fiscal years beginning after December 15,      2008. We intend to adopt FSP EITF 03-6-1 effective January 1, 2009 and      apply its provisions retrospectively to all prior-period EPS data      presented in our financial statements.  We have periodically issued      share-based payment awards that contain nonforfeitable rights to dividends      and are in the process of evaluating the impact that the adoption of FSP      EITF 03-6-1 will have on our consolidated financial      statements. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Description                                                                          |   | Discussion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Rabbi      Trust investment ($386 thousand) in 73 thousand shares of our      stock. |   | Our      consolidated condensed financial statements include the assets and      liabilities of a Rabbi Trust established to hold the investments of      participants in our 401(k) Wrap Plan and for deferred compensation      liabilities under our Executive Bonus and Phantom Stock Plan. Such      liabilities are adjusted from time to time to reflect changes in the      market price of our common stock. Accordingly, our future compensation      expense and income will be impacted by fluctuations in the market price of      our common stock. |

Item 4.    Controls andProcedures

As required by Rules 13a-15 and 15d-15 under the SecuritiesExchange Act of 1934, as amended (the "Exchange Act"), the Company has carriedout an evaluation of the effectiveness of the design and operation of theCompany's disclosure controls and procedures as of the end of the period coveredby this Quarterly Report on Form 10-Q.  This evaluation was carriedout under the supervision and with the participation of the Company'smanagement, including our Chief Executive Officer and our Chief FinancialOfficer.  Based upon that evaluation, our Chief Executive Officer andChief Financial Officer concluded that our disclosure controls and procedureswere effective as of the end of the period covered by this Quarterly Report onForm 10-Q.  There were no changes in the Company's internal controlover financial reporting that occurred during the third quarter of fiscal 2008that have materially affected, or that are reasonably likely to materiallyaffect, the Company's internal control over financialreporting.

PART II.  OTHERINFORMATION

----

On June 15, 2007, the Court denied Plaintiffs’motion for class certification, leaving only the Plaintiffs’ individual claimsfor adjudication.  Those claims were settled, and the entire lawsuit wasdismissed with prejudice on October 1, 2008.

 Item 1A.    RiskFactors

Item 2.    Unregistered Sales of EquitySecurities and Use of Proceeds

|  Period                                        | Total      Number of SharesPurchased(a) |         | Average      PricePaid      per Share(b) |   | Total      Number of Shares Purchasedas      Part of Publicly Announced Plansor      Programs(c) |   | Maximum      Number(or Approximate Dollar Value)      of Shares That MayYet Be Purchased Under the      Plansor      Programs (1)  (d) |   |
|-----------------------------------------------------|----------------------------------------------|--------------|------------------------------------------|--------|--------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| July      1 to July 31, 2008                        | --                                           |         | $                                   | --     |                                                                                             | --     |                                                                                                                                                  |   | 1,111,500 | (4)  |
| August      1 to August 31, 2008                    | --                                           |         |                                     | --     |                                                                                             | --     |                                                                                                                                                  |   | 1,111,500 |   |
| September      1 to September 30, 2008 (2)      (3) | 33,514                                       |    |                                     | 6.44   |                                                                                             | --     |                                                                                                                                                  |   | 1,111,500 |   |
| Total                                               | 33,514                                       |         | $                                        | 6.44   |                                                                                             | --     |                                                                                                                                                  |   |   |   |

| (1)    | On      November 9, 2007, our Board of Directors renewed our authorization to      purchase up to 1,357,900 shares of our common stock. The authorization      allows purchases from time to time on the open market or through private      transactions at such times as management deems appropriate. The      authorization does not specify an expiration date. Purchases may be      increased, decreased or discontinued by our Board of Directors at any time      without prior notice. |
|-----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)                   | During      the third quarter of 2008, an executive officer exchanged 11,764 shares he      owned for more than one year as consideration for the exercise of stock      options, as permitted by our share option plans.  Such      transactions are not deemed as having been purchased as part of our      publicly announced plans or programs.                                                                                                                                    |
| (3)                   | During      the third quarter of 2008, two executive officers and other employees      simultaneously exercised 21,750 options and sold the resulting 21,750      shares to the company.  Such transactions are not deemed as      having been purchased as part of our publicly announced plans or      programs.                                                                                                                                                                     |
| (4)                   | The      starting point for this table does not match the ending point reported in      our Quarterly Report on Form 10Q for the second quarter of 2008 due to a      clerical error in that report.                                                                                                                                                                                                                                                                                             |

----

Item 3.    DefaultsUpon Senior Securities

   Exhibits

| 31.1   | Certification      of Chief Executive Officer Required by Rule 13a-14(a)(17 CFR      240.13a-14(a)). (filed herewith)                                                              |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                               |
| 31.2   | Certification      of Chief Financial Officer Required by Rule 13a-14(a)(17 CFR      240.13a-14(a)). (filed herewith)                                                              |
|   |                                                                                                                                                                               |
| 32.1   | Certification      of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed      herewith) |
|   |                                                                                                                                                                               |
| 32.2   | Certification      of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed      herewith) |

----

|                               |  FROZEN      FOOD EXPRESS INDUSTRIES, INC. |
|------------------------------------|-------------------------------------------------|
|                               |  (Registrant)                              |
|                               |                                            |   |
|  Dated:      November 7, 2008 |  By                                        |  /s/      Stoney M. Stubbs, Jr. |
|                               |                                            | Stoney      M. Stubbs, Jr.Chairman      of the Board of Directors and President(Principal      Executive Officer) |
|                               |                                            |
|                               |                                            |
|  Dated:      November 7, 2008 |  By                                        |  /s/      Thomas G. Yetter |
|                               |                                            | Thomas      G. YetterSenior      Vice President and Chief Financial Officer(Principal      Financial and Accounting Officer) |

----

   

| 31.1   | Certification      of Chief Executive Officer Required by Rule 13a-14(a)(17 CFR      240.13a-14(a)). (filed herewith)                                                              |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                               |
| 31.2   | Certification      of Chief Financial Officer Required by Rule 13a-14(a)(17 CFR      240.13a-14(a)). (filed herewith)                                                              |
|   |                                                                                                                                                                               |
| 32.1   | Certification      of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed      herewith) |
|   |                                                                                                                                                                               |
| 32.2   | Certification      of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed      herewith) |

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