UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-Q







x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR


15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934





FOR
THE QUARTER ENDED MARCH 31, 2009





OR





o TRANSITION REPORT
PURSUANT TO SECTION 13 OR


15
(d) OF THE SECURITIES EXCHANGE ACT OF 1934





FOR
THE TRANSITION PERIOD
FROM                 to








Commission
file number:





VITRAN
CORPORATION INC.














Ontario,
Canada
              (I.R.S.
      Employer(State
      of incorporation)
              Identification
      No.)





185
The West Mall, Suite 701, Toronto, Ontario, Canada, M9C 5L5


(Address
of principal executive offices)(Zip Code)





416-596-7664


(Registrant’s
telephone number, including area code)








Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90
days.  Yes      x       No    o




Indicate by check mark whether the registrant has
submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post such
files).     Yes      o       No    x




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large accelerated
      filer      o
              Accelerated filer    x
              Non-accelerated filer   o
              Smaller reporting company   o


Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).




Yes oNo 
x




Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.




The
number of shares of common shares outstanding at April 22, 2009 was
13,498,159.













TABLE
OF CONTENT




Item
                        
                        
                        PagePART
      I
                        
                        Financial
      Information1.
                        
                        Financial
      Statements
                        32.
                        
                        Management’s
      Discussion and Analysis
                        113.
                        
                        Quantitative
      and Qualitative Disclosures About Market Risk
                        174.
                        
                        Controls
      and Procedures
                        18PART
      II
                        
                        Other
      Information1.
                        
                        Legal
      Proceedings
                        181.
      A
                        
                        Risk
      Factors
                        182.
                        
                        Unregistered
      Sale of Equity and Use of Proceeds
                        183.
                        
                        Defaults
      Upon Senior Securities
                        184.
                        
                        Submission
      of Matters to a Vote of Security Holders
                        185.
                        
                        Other
      Information
                        196.
                        
                        Exhibits
      and Reports on Form 8-K
                        19






2




Part
I. Financial Information





Item
1: Financial Statements





VITRAN
CORPORATION INC.





CONSOLIDATED
STATEMENTS OF INCOME


(Unaudited)





(In
thousands of United States dollars except for per share amounts)





Three
      months
                          Ended
                          Mar.
      31, 2009
                        
                        
                        Three
      months
                          Ended
                          Mar.
      31, 2008Revenue
                        
                        $
                        139,635
                        
                        
                        $
                        177,507Operating
      expenses:Salaries,
      wages and other employee benefits
                        
                        
                        63,579
                        
                        
                        
                        69,480Purchased
      transportation
                        
                        
                        18,058
                        
                        
                        
                        25,139Depreciation
      and amortization
                        
                        
                        5,027
                        
                        
                        
                        5,560Maintenance
                        
                        
                        5,571
                        
                        
                        
                        7,864Rents
      and leases
                        
                        
                        6,489
                        
                        
                        
                        6,549Purchased
      labor and owner operators
                        
                        
                        17,187
                        
                        
                        
                        20,303Fuel
      and fuel-related expenses
                        
                        
                        13,436
                        
                        
                        
                        27,202Other
      operating expenses
                        
                        
                        13,571
                        
                        
                        
                        13,483Operating
      loss (gain)
                        
                        
                        (429
                        )
                        
                        
                        1Total
      operating expenses
                        
                        
                        142,489
                        
                        
                        
                        175,581Income
      (loss) from operations before undernoted
                        
                        
                        (2,854
                        )
                        
                        
                        1,926Interest
      expense, net
                        
                        
                        2,196
                        
                        
                        
                        2,130Loss
      from operations before income taxes
                        
                        
                        (5,050
                        )
                        
                        
                        (204
                        )Income
      tax recovery
                        
                        
                        (2,694
                        )
                        
                        
                        (1,338
                        )Net
      income (loss)
                        
                        $
                        (2,356
                        )
                        
                        $
                        1,134Income
      (loss) per share:B  
      Basic
                        
                        $
                        (0.17
                        )
                        
                        $
                        0.08Diluted
                        
                        $
                        (0.17
                        )
                        
                        $
                        0.08Weighted
      average number of shares:Basic
                        
                        
                        13,498,159
                        
                        
                        
                        13,465,357Diluted
                        
                        
                        13,498,159
                        
                        
                        
                        13,611,446


See
accompanying notes to consolidated financial statements






3




VITRAN
CORPORATION INC.





CONSOLIDATED
BALANCE SHEETS





(In
thousands of United States dollars)





Mar.
      31, 2009
                            
                            
                            Dec.
      31, 2008(Unaudited)
                            
                            
                            (Audited)AssetsCurrent
      assets:Accounts
      receivable
                            
                            $
                            65,808
                            
                            
                            $
                            65,741Inventory,
      deposits and prepaid expenses
                            
                            
                            11,751
                            
                            
                            
                            12,063Income
      and other taxes recoverable
                            
                            
                            1,456
                            
                            
                            
                            792Deferred
      income taxes
                            
                            
                            1,935
                            
                            
                            
                            1,87780,950
                            
                            
                            
                            80,473Property
      and equipment
                            
                            
                            147,686
                            
                            
                            
                            152,602Intangible
      assets
                            
                            
                            12,648
                            
                            
                            
                            13,279Goodwill
                            
                            
                            16,880
                            
                            
                            
                            17,057Deferred
      income taxes
                            
                            
                            32,631
                            
                            
                            
                            30,181$
                            290,795
                            
                            
                            $
                            293,592Liabilities
      and Shareholders’ EquityCurrent
      liabilities:Bank
      overdraft
                            
                            $
                            1,845
                            
                            
                            $
                            3,912Accounts
      payable and accrued liabilities
                            
                            
                            63,477
                            
                            
                            
                            63,495Current
      portion of long-term debt
                            
                            
                            17,464
                            
                            
                            
                            16,92582,786
                            
                            
                            
                            84,332Long-term
      debt
                            
                            
                            95,543
                            
                            
                            
                            93,477Other
                            
                            
                            4,089
                            
                            
                            
                            4,540Shareholders’
      equity:Common
      shares, no par value, unlimited authorized,13,498,159
      issued and outstanding atMarch
      31, 2009 and December 31, 2008.
                            
                            
                            77,500
                            
                            
                            
                            77,500Additional
      paid-in capital
                            
                            
                            3,759
                            
                            
                            
                            3,525Retained
      earnings
                            
                            
                            30,897
                            
                            
                            
                            33,253Accumulated
      other comprehensive loss
                            
                            
                            (3,779
                            )
                            
                            
                            (3,035
                            )108,377
                            
                            
                            
                            111,243$
                            290,795
                            
                            
                            $
                            293,592


Contingent
liabilities (note 7)





See
accompanying notes to consolidated financial statements.




4




VITRAN
CORPORATION INC.





CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY


(Unaudited)





(In
thousands of United States dollars, except share amounts)





AccumulatedAdditional
                        
                        
                        
                        
                        
                        other
                        
                        
                        TotalCommon
      shares
                        
                        
                        Paid-in
                        
                        
                        Retained
                        
                        
                        comprehensive
                        
                        
                        Shareholders’Shares
                        
                        
                        Amount
                        
                        
                        Capital
                        
                        
                        Earnings
                        
                        
                        Loss
                        
                        
                        EquityDecember
      31, 2008
                        
                        
                        13,498,159
                        
                        
                        $
                        77,500
                        
                        
                        $
                        3,525
                        
                        
                        $
                        33,253
                        
                        
                        $
                        (3,035
                        )
                        
                        $
                        111,243Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (2,356
                        )
                        
                        
                        -
                        
                        
                        
                        (2,356
                        )Other
      comprehensive loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (744
                        )
                        
                        
                        (744
                        )Share-based
      compensation
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        234
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        234March
      31, 2009
                        
                        
                        13,498,159
                        
                        
                        $
                        77,500
                        
                        
                        $
                        3,759
                        
                        
                        $
                        30,897
                        
                        
                        $
                        (3,779
                        )
                        
                        $
                        108,377





AccumulatedAdditional
                    
                    
                    
                    
                    
                    other
                    
                    
                    TotalCommon
      shares
                    
                    
                    Paid-in
                    
                    
                    Retained
                    
                    
                    comprehensive
                    
                    
                    Shareholders’Shares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Earnings
                    
                    
                    income
                    
                    
                    EquityDecember
      31, 2007
                    
                    
                    13,448,159
                    
                    
                    $
                    77,246
                    
                    
                    $
                    2,436
                    
                    
                    $
                    104,478
                    
                    
                    $
                    6,184
                    
                    
                    $
                    190,344Shares
      issued upon exercise of employee stock options
                    
                    
                    35,000
                    
                    
                    
                    178
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    178Net
      income
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,134
                    
                    
                    
                    -
                    
                    
                    
                    1,134Other
      comprehensive loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,967
                    )
                    
                    
                    (1,967
                    )Share-based
      compensation
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    277
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    277March
      31, 2008
                    
                    
                    13,483,159
                    
                    
                    $
                    77,424
                    
                    
                    $
                    2,713
                    
                    
                    $
                    105,612
                    
                    
                    $
                    4,217
                    
                    
                    $
                    189,966




5




VITRAN
CORPORATION INC.





CONSOLIDATED
STATEMENTS OF CASH FLOWS


(Unaudited)


(In
thousands of United States dollars)





Three
      months
                        Ended
                        Mar.
      31, 2009
                      
                      
                      Three
      months
                        Ended
                        Mar.
      31, 2008Cash
      provided by (used in):Operations:Net
      income (loss)
                      
                      $
                      (2,356
                      )
                      
                      $
                      1,134Items
      not involving cash from operationsDepreciation
      and amortization expense
                      
                      
                      5,027
                      
                      
                      
                      5,560Deferred
      income taxes
                      
                      
                      (2,320
                      )
                      
                      
                      (1,198
                      )Share-based
      compensation expense
                      
                      
                      234
                      
                      
                      
                      277Loss
      (gain) on sale of property and equipment
                      
                      
                      (429
                      )
                      
                      
                      1Change
      in non-cash working capital components
                      
                      
                      (246
                      )
                      
                      
                      (1,113
                      )(90
                      )
                      
                      
                      4,661Investments:Purchase
      of property and equipment
                      
                      
                      (1,627
                      )
                      
                      
                      (7,108
                      )Proceeds
      on sale of property and equipment
                      
                      
                      1,047
                      
                      
                      
                      191(580
                      )
                      
                      
                      (6,917
                      )Financing:Change
      in revolving credit facility and bank overdraft
                      
                      
                      4,626
                      
                      
                      
                      6,625Repayment
      of long-term debt
                      
                      
                      (2,268
                      )
                      
                      
                      (2,571
                      )Repayment
      of capital leases
                      
                      
                      (1,820
                      )
                      
                      
                      (2,241
                      )Issue
      of common shares
                        upon
      exercise of stock options
                      
                      
                      -
                      
                      
                      
                      178538
                      
                      
                      
                      1,991Effect
      of translation adjustment on cash
                      
                      
                      132
                      
                      
                      
                      265Increase
      in cash and cash equivalents
                      
                      
                      -
                      
                      
                      
                      -Cash
      and cash equivalents, beginning of period
                      
                      
                      -
                      
                      
                      
                      -Cash
      and cash equivalents, end of period
                      
                      $
                      -
                      
                      
                      $
                      -Change
      in non-cash working capital components:Accounts
      receivable
                      
                      $
                      (67
                      )
                      
                      $
                      (7,671
                      )Inventory,
      deposits and prepaid expenses
                      
                      
                      312
                      
                      
                      
                      (401
                      )Income
      and other taxes recoverable
                      
                      
                      (723
                      )
                      
                      
                      1,131Accounts
      payable and accrued liabilities
                      
                      
                      232
                      
                      
                      
                      5,828$
                      (246
                      )
                      
                      $
                      (1,113
                      )


See
accompanying notes to consolidated financial statements.






6





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)





(In
thousands of United States dollars except for per share amounts)








1.  Accounting
Policies





The
interim consolidated financial statements have been prepared in accordance with
United States generally accepted accounting principles.  The interim
consolidated financial statements do not contain all the disclosures required by
United States generally accepted accounting principles.  The interim
consolidated financial statements have been prepared in accordance with
instructions to Quarterly Report on Form 10-Q.  The interim
consolidated financial statements should be read in conjunction with 2008 Annual
Report on Form 10-K.  The interim consolidated financial statements
follow the same accounting principles and methods of application as the most
recent annual consolidated financial statements, except as noted in Note
2.





These
unaudited consolidated interim financial statements reflect all adjustments
which are, in the opinion of management, necessary to a fair presentation of the
results of the interim period presented.  Operating results for the
quarter ended March 31, 2009 are not necessarily indicative of the results of
operations that may be expected for the year ending December 31,
2009.


2.
New Accounting Pronouncements








SFAS
Statement 161, “Disclosures about Derivative Instruments and Hedging Activities
- an amendment of FASB Statement No. 133”, requires enhanced disclosures about
the Company’s derivative and hedging activities.  The Company is
required to provide enhanced disclosure 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 c) how derivative
instruments and related hedged items affect an entity’s financial position and
cash flows.  SFAS Statement 161 was adopted January 1, 2009 as
described in Note 8.





3.  Foreign
Currency Translation





The
United States dollar is the functional currency of the Company’s operations in
the United States.  The Canadian dollar is the functional currency of
the Company’s Canadian operations.  Each operation translates foreign
currency denominated transactions into its functional currency using the rate of
exchange in effect at the date of the transaction.  Monetary assets
and liabilities denominated in foreign currency are translated into the
functional currency of the operation using the period-end rate of exchange
giving rise to a gain or loss that is recognized in income during the current
period.





For
reporting purposes, the Canadian operations are translated into United States
dollars using the current rate method.  Under this method, all assets
and liabilities are translated at the period-end rate of exchange and all
revenue and expense items are translated at the average rate of exchange for the
period.  The resulting translation adjustment is recorded as a
separate component of shareholders’ equity.  United States dollar debt
of $80.1 million is designated as a hedge of the investment in the United States
dollar functional operations, such that related transaction gains and losses are
recorded in the separate component of shareholders’ equity.





4.  Comprehensive income
(loss)





The
components of other comprehensive income (loss) (“OCI”) such as changes in
foreign currency adjustments are required to be added to the Company’s reported
net income to arrive at comprehensive net income (loss).  Other
comprehensive income (loss) items have no impact on the reported net income as
presented on the Consolidated Statements of Income.





7




The
following are the components of other comprehensive income (loss), net of income
taxes for the three months ended March 31, 2009 and 2008:





Three
      months
                      Ended
                      Mar.
      31, 2009
                    
                    
                    Three
      months
                      Ended
                      Mar.
      31, 2008Net
      income (loss)
                    
                    $
                    (2,356
                    )
                    
                    $
                    1,134Translation
      adjustment
                    
                    
                    (1,017
                    )
                    
                    
                    (1,025
                    )Interest
      rate swaps
                    
                    
                    387
                    
                    
                    
                    (1,449
                    )Tax
      effect
                    
                    
                    (114
                    )
                    
                    
                    507Other
      comprehensive income (loss)
                    
                    $
                    (744
                    )
                    
                    $
                    (1,967
                    )Comprehensive
      net income (loss)
                    
                    $
                    (3,100
                    )
                    
                    $
                    (833
                    )





5.  Computation
of Income (Loss) per Share





Three
      months
                                Ended
                                Mar.
      31, 2009
                              
                              
                              Three
      months
                                Ended
                                Mar.
      31, 2008Numerator:Net
      income (loss)
                              
                              $
                              (2,356
                              )
                              
                              $
                              1,134Denominator:Basic
      weighted-average shares outstanding
                              
                              
                              13,498,159
                              
                              
                              
                              13,465,357Dilutive
      stock options
                              
                              
                              -
                              
                              
                              
                              146,089Dilutive
      weighted-average shares outstanding
                              
                              
                              13,498,159
                              
                              
                              
                              13,611,446Basic
      income (loss) per share
                              
                              $
                              (0.17
                              )
                              
                              $
                              0.08Diluted
      income (loss) per share
                              
                              $
                              (0.17
                              )
                              
                              $
                              0.08








Due
to the net loss for the three months ended March 31, 2009, dilutive shares have
no effect on the loss per share.  Diluted income per share excludes
the effect of 658,900 anti-dilutive options for the three months ended March 31,
2008.





6.  Assets
Held for Sale





The
Company has certain assets that are classified as assets held for
sale.  These assets are carried on the balance sheet at the lower of
the carrying amount or estimated fair value, less cost to sell.  Once
an asset is classified held for sale, there is no further depreciation taken on
the asset.  At March 31, 2009, the net book value of assets held for
sale was approximately $4.6 million.  This amount is included in
property and equipment on the balance sheet.








7.  Contingent
Liabilities





The
Company is subject to legal proceedings that arise in the ordinary course of
business.  In the opinion of management, the aggregate liability, if
any, with respect to these actions, will not have a material adverse effect on
the consolidated financial position, results of operations or cash
flows.  Legal costs are expensed as incurred.


8. 
Risk Management Activities and Fair Value Measurements








The
Company is exposed to market risks, including the effect of changes in foreign
currency exchange rates and interest rates, and uses derivatives to manage
financial exposures that occur in the normal course of business.  The
Company does not hold or issue derivatives for trading purposes.





8




Interest
Rate Swaps





The
Company is exposed to interest rate volatility with regard to existing variable
rate debt.  The Company has entered into variable-to-fixed interest
rate swaps on variable rate term debt and revolving debt to limit its exposure
to changing interest rates and future cash flows for interest.  The
interest rate swaps provide for the Company to pay an amount equal to a
specified fixed rate of interest times a notional principal amount and to
receive in return an amount equal to a variable rate of interest times the same
notional amount.  The swaps are accounted for as cash flow
hedges.  The effective portions of changes in fair value of the
interest rate swaps are recorded in Accumulated Other Comprehensive Income and
are recognized into earnings in the same period in which the hedged forecasted
transaction affects earnings.  Ineffective portions of changes in fair
value are recognized into earnings as they occur.  At March 31, 2009,
the notional amount of the swaps was $62.6 million, with the average pay rate
being 4.58% and the average receive rate being 1.22%.  The swaps
mature at various dates up to December 31, 2011.





The
Company primarily applies the income approach for recurring fair value
measurements and endeavours to utilize the best available
information.  Accordingly, the Company utilizes valuation techniques
that maximize the use of observable inputs and minimize the use of unobservable
inputs.  The Company is able to classify fair value balances based on
the observability of those inputs.





SFAS
No. 157 establishes a fair value hierarchy that prioritizes the inputs used to
measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1
measurement) and the lowest priority to unobservable inputs (Level 3
measurement).





Assets
and liabilities measured at fair value on a recurring basis include the
following as of March 31, 2009:





Fair
      Value Measurements Using
                    
                    Liabilities(in
      thousands)
                    Level
      1
                    
                    Level
      2
                    
                    Level
      3
                    
                    At Fair
      ValueLiabilitiesInterest
      rate swaps
                    
                    $
                    -
                    
                    
                    $
                    2,576
                    
                    
                    $
                    -
                    
                    
                    $
                    2,576Total
      liabilities
                    
                    $
                    -
                    
                    
                    $
                    2,576
                    
                    
                    $
                    -
                    
                    
                    $
                    2,576








The
following table presents the fair value of derivative instruments at and for the
three months ended March 31, 2009:








Notional
                    Amount
                  
                  
                  Fair
      Value
                  
                  Balance
      Sheet Location
                  
                  Gain
      (loss) in OCI
                    Three
      months ended
                    March
      31, 2009Interest
      rate swaps
                  
                  $
                  62,609
                  
                  
                  $
                  2,576
                  
                  Other
      liabilities
                  
                  $
                  387





9.  Segmented
Information








Three
      months
                    Ended
                    Mar.
      31, 2009
                  
                  
                  Three
      months
                    Ended
                    Mar.
      31, 2008Revenue:LTL
                  
                  $
                  115,364
                  
                  
                  $
                  149,415Logistics
                  
                  
                  16,262
                  
                  
                  
                  19,760Truckload
                  
                  
                  8,009
                  
                  
                  
                  8,332Corporate
      office and other
                  
                  
                  -
                  
                  
                  
                  -$
                  139,635
                  
                  
                  $
                  177,507







9


Three
      months
                    Ended
                    Mar.
      31, 2009
                  
                  
                  Three
      months
                    Ended
                    Mar.
      31, 2008Operating
      income (loss):LTL
                  
                  $
                  (2,684
                  )
                  
                  $
                  2,137Logistics
                  
                  
                  421
                  
                  
                  
                  720Truckload
                  
                  
                  192
                  
                  
                  
                  379Corporate
      office and other
                  
                  
                  (783
                  )
                  
                  
                  (1,310
                  )$
                  (2,854
                  )
                  
                  $
                  1,926








Three
      months
                    Ended
                    Mar.
      31, 2009
                  
                  
                  Three
      months
                    Ended
                    Mar.
      31, 2008Depreciation
      and amortization:LTL
                  
                  $
                  4,375
                  
                  
                  $
                  4,859Logistics
                  
                  
                  390
                  
                  
                  
                  419Truckload
                  
                  
                  241
                  
                  
                  
                  261Corporate
      office and other
                  
                  
                  21
                  
                  
                  
                  21$
                  5,027
                  
                  
                  $
                  5,560





10.  Comparative
figures





Certain
comparative figures have been reclassified to conform to the financial statement
presentation adopted in the current year.




10




Item
2. Management’s Discussion and Analysis of Results of Operation





This
MD&A and the documents incorporated by reference contains forward-looking
statements within the meaning of the United States Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities laws concerning Vitran’s
business, operations, and financial performance and condition.





Forward-looking
statements may be generally identifiable by use of the words “believe”,
“anticipate”, “intend”, “estimate”, “expect”, “project”, “may”, “plans”,
“continue”, “will”, “focus”, “should”, “endeavor” or the negative of these words
or other variation on these words or comparable terminology.  These
forward-looking statements are based on current expectations and are subject to
uncertainty and changes in circumstances that may cause actual results to differ
materially from those expressed or implied by such forward-looking
statements.





The MD&A and the documents
incorporated by reference herein contain forward-looking statements regarding,
but not limited to, the following:





•
            The Company’s belief it will
      generate sufficient taxable income to use deferred tax
      assets;





•
            the Company’s ability to
      realize cost savings from re-engineering its linehaul and pick-up and
      delivery operations in the U.S. LTL business
  unit;





•
            the Company’s ability to
      realize cost savings from wage and salary
    reductions;





•
            the Company’s intention to
      maintain sales momentum and to achieve income from operations in
      the  LTL segment;





•
            the Company’s expectation to
      return its days sales outstanding measure to historical
      levels;





•
            the Company’s intention to
      purchase a specified level of capital assets and to finance such
      acquisitions with cash flow from operations and, if necessary, from the
      Company’s revolving credit
facilities;





•
            the Company’s expectation to
      improve profitability from estimated market share gains in the LTL
      segment;





•
            the Company’s intention to
      develop new accounts in the Logistics
  segment;





•
            the Company’s expectation to
      continually adjust its strategy and tactics for the betterment of the
      Company, the employees and the
  shareholders.





Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause Vitran’s actual results, performance or
achievements to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking
statements.  Factors that may cause such differences include but are
not limited to technological change, increase in fuel costs, regulatory change,
changes in tax legislation, the general health of the economy, changes in labor
relations, geographic expansion, capital requirements, availability of
financing, claims and insurance costs, environmental hazards, availability of
qualified drivers and competitive factors.  More detailed information
about these and other factors is included in the MD&A.  Many of
these factors are beyond the Company’s control; therefore, future events may
vary substantially from what the Company currently foresees. You should not
place undue reliance on such forward-looking statements.  Vitran
Corporation Inc. does not assume the obligation to revise or update these
forward-looking statements after the date of this document or to revise them to
reflect the occurrence of future unanticipated events, except as may be required
under applicable securities laws.





Unless otherwise indicated all
dollar references herein are in U.S. dollars.  The Company’s Annual
Report on Form 10-K, as well as all the Company’s other required filings, may be
obtained from the Company at www.vitran.com or from www.sedar.com or fromwww.sec.gov. This
MD&A and the documents incorporated by reference contain forward-looking
statements within the meaning of the United States Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities laws concerning Vitran’s
business, operations, and financial performance and
condition.




11




CONSOLIDATED
RESULTS





The
following table summarizes the Consolidated Statements of Income (loss) for the
three-month periods ended March 31:





For
      the three months ended March 31,(in
      thousands)
                  
                  2009
                  
                  
                  2008
                  
                  
                  2009 vs
      2008Revenue
                  
                  $
                  139,635
                  
                  
                  $
                  177,507
                  
                  
                  
                  (21.3
                  %)Salaries,
      wages and employee benefits
                  
                  
                  63,579
                  
                  
                  
                  69,480
                  
                  
                  
                  (8.5
                  %)Purchased
      transportation
                  
                  
                  18,058
                  
                  
                  
                  25,139
                  
                  
                  
                  (28.2
                  %)Depreciation
      and amortization
                  
                  
                  5,027
                  
                  
                  
                  5,560
                  
                  
                  
                  (9.6
                  %)Maintenance
                  
                  
                  5,571
                  
                  
                  
                  7,864
                  
                  
                  
                  (29.2
                  %)Rents
      and leases
                  
                  
                  6,489
                  
                  
                  
                  6,549
                  
                  
                  
                  (0.9
                  %)Purchased
      labor and owner operators
                  
                  
                  17,187
                  
                  
                  
                  20,303
                  
                  
                  
                  (15.3
                  %)Fuel
      and fuel related expenses
                  
                  
                  13,436
                  
                  
                  
                  27,202
                  
                  
                  
                  (50.6
                  %)Other
      operating expenses
                  
                  
                  13,571
                  
                  
                  
                  13,483
                  
                  
                  
                  0.7
                  %Operating
      loss (gain)
                  
                  
                  (429
                  )
                  
                  
                  1
                  
                  
                  
                  (430.0
                  %)Total
      Expenses
                  
                  
                  142,489
                  
                  
                  
                  175,581Income
      from operations
                  
                  
                  (2,854
                  )
                  
                  
                  1,926
                  
                  
                  
                  (248.2
                  %)Interest
      expense, net
                  
                  
                  2,196
                  
                  
                  
                  2,130
                  
                  
                  
                  3.1
                  %Income
      tax recovery
                  
                  
                  (2,694
                  )
                  
                  
                  (1,338
                  )
                  
                  
                  101.3
                  %Net
      income (loss)
                  
                  $
                  (2,356
                  )
                  
                  $
                  1,134
                  
                  
                  
                  (307.8
                  %)Income
      (loss) per share:Basic
                  
                  $
                  (0.17
                  )
                  
                  $
                  0.08Diluted
                  
                  $
                  (0.17
                  )
                  
                  $
                  0.08Operating Ratio(1)
                  
                  
                  102.0
                  %
                  
                  
                  98.9
                  %





Revenue
decreased 21.3% to $139.6 million for the first quarter of 2009 compared to
$177.5 million in the first quarter of 2008.  Revenue in the LTL,
Logistics and Truckload segments decreased 22.8%, 17.7% and 3.9%,
respectively.   Revenue for the first quarter of 2009 was
impacted by a weaker Canadian dollar and decline in fuel surcharge revenue
accounting for approximately $22.0 million of the consolidated revenue
decline.  Detailed explanations for the fluctuations in revenue are
discussed below in “Segmented Results”.





Salaries,
wages and employee benefits declined 8.5% for the first quarter of 2009 compared
to the same period a year ago.  This is consistent with the decline in
employee headcount at March 31, 2008 of 5,076 employees to 4,694 employees at
March 31, 2009.





Purchased
transportation declined 28.2% in the first quarter of 2009 compared to the first
quarter of 2008 due to an emphasis on purchased transportation cost reductions
in the U.S. LTL business resulting from the new integrated operating
region.  Furthermore, the general decline in economic activity, as
indicated by the decline in total LTL shipments of 12.7%, resulted in less
purchased transportation expense throughout North America.





Depreciation
and amortization reductions in the first quarter of 2009 compared to the first
quarter of 2008 can be primarily attributed to the sale of rolling stock in the
first quarter of 2009 and the fourth quarter of 2008.  The Company
sold 258 units in the first quarter of 2009 and 108 units in the fourth quarter
of 2008.  This resulted in gains on rolling stock dispositions of
approximately $0.4 million in the first quarter of 2009.





Maintenance
expense declined 29.2% to $5.6 million for the period ended March 31, 2009
compared to $7.9 million for the period ended March 31, 2008.  The
decline in maintenance expense can be attributed to the aforementioned
reductions in rolling stock as well as the closure of 13 operating facilities
due to the completion of the LTL operations integration in the fourth quarter of
2008.





12




Rents
and leases declined almost 1% in the first quarter of 2009 compared to the first
quarter of 2008 due to increase in square footage under lease in the asset light
Logistics segment offset by declines in facility lease costs in the U.S. LTL
business unit.





Purchased
labor and owner operator expenses, primarily driven by the Canadian LTL business
unit, declined in the comparable first quarter of 2009 and 2008 due to a 13%
drop in shipments and 5.2% drop in tonnage in the Canadian LTL business
unit.  Furthermore, declines in retail supply chain revenues in the
Logistics segment’s California operations resulted in an additional reduction of
purchased labor.





Fuel
and fuel-related expenses declined 50.6% due to the dramatic decline in diesel
prices for the first quarter of 2009 compared to the first quarter of
2008.  The average price of diesel declined approximately 42.6% in the
first quarter of 2009 compared to first quarter of 2008.  Furthermore,
the Company’s fuel consumption declined, as indicated by an approximately 9.2%
reduction in miles in the first quarter of 2009 compared to the first quarter of
2008.  The reduction in miles can be attributed to the completion of
the U.S. LTL operation integration in the fourth quarter of 2008 and the
reduction in shipments for the first quarter of 2009 compared to the same period
a year ago.





The
Company incurred interest expense of $2.2 million in the first quarter of 2009
compared to interest expense of $2.1 million for the same quarter a year
ago.  The Company’s interest rate spread on its syndicated revolving
and term debt was 200 bps greater than the first quarter of 2008; however, the
underlying decline in average LIBOR borrowings on the syndicated debt partially
offset the increase in spread resulting in a $0.1 million increase in interest
expense.





Income
tax recovery for the first quarter of 2009 was $2.7 million compared to a
recovery of $1.3 million for the same quarter a year ago due to an increase in
loss before income tax expense.  On a consolidated basis, the Company
generated taxable losses in the United States, which have been recognized as
deferred tax assets.  Management believes the Company will generate
sufficient taxable income to use these losses in the
future.





The
Company incurred a net loss of $2.4 million for the 2009 first quarter compared
to net income of $1.1 million for the same quarter in 2008.  This
resulted in basic and diluted loss per share of $0.17 for the first quarter of
2009 compared to basic and diluted income per share from operations of $0.08 for
the first quarter of 2008.  The weighted average number of shares for
the current quarter was 13.5 million compared to 13.5 million basic and 13.6
million diluted shares in the first quarter of 2008.





SEGMENTED
RESULTS





Less-Than-Truckload
(LTL)





The
table below provides summary information for the LTL segment for the three-month
periods ended March 31:





For
      the three months ended March 31,(in
      thousands)
              
              2009
              
              
              2008
              
              
              2009 vs
      2008Revenue
              
              $
              115,364
              
              
              $
              149,415
              
              
              
              (22.8
              %)Income
      from operations (loss)
              
              
              (2,684
              )
              
              
              2,137
              
              
              
              (225.6
              %)Operating
      ratio
              
              
              102.3
              %
              
              
              98.6
              %Number
      of shipments (2)
              
              
              853,668
              
              
              
              977,811
              
              
              
              (12.7
              %)Weight
      (000s of lbs) (3)
              
              
              1,276,668
              
              
              
              1,490,474
              
              
              
              (14.3
              %)Revenue
      per shipment (4)
              
              $
              135.14
              
              
              $
              152.81
              
              
              
              (11.6
              %)Revenue
      per hundredweight (5)
              
              $
              9.04
              
              
              $
              10.02
              
              
              
              (9.8
              %)





Revenue
in the LTL segment decreased 22.8% to $115.4 million in the first quarter of
2009 compared to $149.4 million in the same period a year ago.  The
decrease in revenue was significantly influenced by fuel surcharge which
represented 9.2% of revenue in the first quarter of 2009 compared to 15.8% of
revenue in the first quarter of 2008.  Revenue, net of fuel surcharge
was impacted by the weak economic environment in North America in the first
quarter of 2009 as indicated by the decline in shipments and tonnage of 12.7%
and 14.3% respectively compared to the first quarter of
2008.  Although the economic environment continued to be challenging,
shipments per day in the U.S. LTL business unit increased monthly from December
31, 2008 to March 31, 2009, 3.0%, 2.0% and 4.0% sequentially.  This
can be attributed to the new integrated operating footprint in the United
States, allowing the business unit to expand its service offering across longer
lanes and achieve market share growth.  This was confirmed by the
10.0% increase in length of haul(7) from
July 31, 2008 to March 31, 2009.





13




The
LTL segments labour force at March 31, 2009 was reduced by 13.3% from the third
quarter of 2008.  Furthermore, maintenance costs were reduced compared
to the prior year first quarter and the U.S. LTL integrated operating model was
finalized in the fourth quarter of 2008.  Nevertheless, the segment
could not abate the aforementioned downturn in revenue in the first quarter
2009, however, and most importantly the LTL segment reported an operating ratio
of 99.5% in the month of March 2009.  The LTL segment has taken
further intiatives in early April 2009 re-engineering its linehaul and pick-up
and delivery operations to reduce claims expenses, reduce dock handling costs
and linehaul expenses.  Lastly on April 13, 2009, the Company
announced a 5% reduction in wages and salaries for all
employees.  Management believes these intiatives, with the new
integrated U.S. LTL operating model and the current sales momentum, will result
in income from operations in the quarters ahead.





Logistics





The
table below provides summary information for the Logistics segment for the
three-month periods ended March 31:





For
      the three months ended March 31,(in
      thousands)
                  
                  2009
                  
                  
                  2008
                  
                  
                  2009 vs
      2008Revenue
                  
                  $
                  16,262
                  
                  
                  $
                  19,760
                  
                  
                  
                  (17.7
                  %)Income
      from operations
                  
                  
                  421
                  
                  
                  
                  720
                  
                  
                  
                  (41.5
                  %)Operating
      ratio
                  
                  
                  97.4
                  %
                  
                  
                  96.4
                  %





Revenue
and income from operations for the Logistics segment decreased by 17.7% and
41.5%, respectively for the first quarter of 2009 compared to the same period in
2008.  The decreases are primarily attributable to a significant
slowdown in retail activity levels in the current North American
economy.  Effective March 1, 2009 the segment commenced a new 240,000
square foot dedicated distribution facility in California which had a positive
impact on the results for the current quarter.





Truckload





The
table below provides summary information for the Truckload segment for the
three-month periods ended March 31:





For
      the three months ended March 31,(in
      thousands)
                  
                  2009
                  
                  
                  2008
                  
                  
                  2009 vs
    2008Revenue
                  
                  $
                  8,009
                  
                  
                  $
                  8,332
                  
                  
                  
                  (3.9
                  %)Income
      from operations
                  
                  
                  192
                  
                  
                  
                  379
                  
                  
                  
                  (49.3
                  %)Operating
      ratio
                  
                  
                  97.6
                  %
                  
                  
                  95.5
                  %





Revenue
in the Truckload segment of $8.0 million for the first quarter of 2009 was 3.9%
less than the first quarter of 2008.  Revenue per mile(6)and
total shipments decreased 2.5% and 3.4%, respectively compared to the 2008 first
quarter.  As a result, income from operations decreased $0.2 million
and the Truckload segment posted an operating ratio of 97.6% in the first
quarter of 2009 compared to 95.5% for the first quarter of 2008.








LIQUIDITY
AND CAPITAL RESOURCES





Cash
flow from operations for the first quarter of 2009 consumed $0.1 million
compared to the first quarter of 2008 that generated $4.7
million.  The decline is attributable to a decrease in profitability,
as described in the Consolidated and Segmented Results sections of the MD&A
and an increase in non-cash deferred tax assets attributable to the accumulation
of loss carry forwards.  Accounts receivable at March 31, 2009 was
flat compared to December 31, 2008, due to a decline in 2009 first quarter
revenue and increase in days sales outstanding (“DSO”) compared to the 2008
first quarter.  Due to the challenging economic environment, customers
have slowed their payment cycle and at March 31, 2009, the Company’s DSO was
45.7 days compared to 39.8 days at March 31, 2008.





14




Albeit
the Company’s DSO had risen over the second half of 2008 through to March 31,
2009, it is consistent with change in the economic environment over that time
period.  It is management’s intention to return DSO to historical
levels of approximately 40 days.  The increase in DSO should not have
a material impact on the financial position or liquidity of the
Company.





Within
the syndicated credit facilities at March 31, 2009, interest-bearing debt was
$97.2 million consisting of $46.0 million of term debt and $51.2 million drawn
under the revolving credit facility.  In addition, the Company had
$1.6 million of additional term debt and $14.2 million of capital leases for a
total of $113.0 million of interest-bearing debt outstanding at March 31,
2009.  At March 31, 2008, interest-bearing debt was
$126.6 million consisting of $56.7 million of term debt, capital leases of
$20.6 million, $48.4 million drawn under the revolving credit facility and a
note payable of $0.9 million.





During
the first quarter of 2009, the Company repaid $2.3 million of term debt and $1.8
million of capital leases and borrowed $4.6 million on the revolving credit
facility.  At March 31, 2009, the Company had $23.2 million of unused
credit facilities, net of outstanding letters of credit.





The
Company generated $1.0 million in proceeds and gains on sale of $0.4 million on
the divestiture of surplus equipment and a facility in Louisville,
Kentucky.  Capital expenditures amounted to $1.6 million for the 2009
first quarter and were primarily funded out of proceeds from sale and operating
cash flows. The capital expenditures in 2009 first quarter were for land in
Winnipeg, rolling stock and information technology expenditures.  In
the first quarter of 2008 the majority of capital expenditures were for the
purchase of facilities in Kansas City, Kansas; Las Vegas, Nevada; and
construction costs of the new LTL service center in Toronto,
Ontario.  The table below sets forth the Company’s capital
expenditures for the three-month periods ended March 31, 2009 and
2008.





For
      the three months ended March 31,(in
      thousands of dollars)
                  
                  2009
                  
                  
                  2008Real
      estate and buildings
                  
                  $
                  704
                  
                  
                  $
                  6,376Tractors
                  
                  
                  516
                  
                  
                  
                  47Trailing
      fleet
                  
                  
                  14
                  
                  
                  
                  209Information
      technology
                  
                  
                  255
                  
                  
                  
                  228Leasehold
      improvements
                  
                  
                  4
                  
                  
                  
                  72Other
      equipment
                  
                  
                  134
                  
                  
                  
                  176Total
                  
                  $
                  1,627
                  
                  
                  $
                  7,108





Management
estimates that cash capital expenditures, excluding real estate additions for
the remainder of 2009, will be between $6.0 million and $10.0
million.   The Company may potentially enter into operating
leases to fund the acquisition of specific equipment should the business levels
exceed the current equipment capacity of the Company.  The Company
expects to finance its capital requirements with cash flow from operations, new
capital or operating leases and, if required, its $23.2 million of unused
credit facilities.





The
Company has contractual obligations for principal payments that include
long-term debt consisting of term debt facilities, revolving credit facilities
and capital leases for operating equipment. The Company utilizes off-balance sheetoperating
leases primarily consisting of tractor, trailing fleet and real estate
leases.  Operating leases form an integral part of the Company’s
financial structure and operating methodology as they provide an alternative
cost effective and flexible form of financing.





15




The
following table summarizes our significant contractual obligations and
commercial commitments as of March 31, 2009:





(in
      thousands of dollars)
                  
                  
                  
                  
                  Payments
      due by periodContractual
      Obligations
                  
                  Total
                  
                  
                  2009
                  
                  
                  2010
      & 2011
                  
                  
                  2012
      & 2013
                  
                  
                  ThereafterTerm
      credit facilities
                  
                  $
                  47,609
                  
                  
                  $
                  8,805
                  
                  
                  $
                  28,804
                  
                  
                  $
                  10,000
                  
                  
                  $ NilRevolving
      credit facilities
                  
                  
                  51,243
                  
                  
                  Nil
                  
                  
                  Nil
                  
                  
                  
                  51,243
                  
                  
                  NilCapital
      lease obligations
                  
                  
                  14,155
                  
                  
                  
                  4,033
                  
                  
                  
                  7,873
                  
                  
                  
                  2,249
                  
                  
                  NilEstimated
      interest payments (1)
                  
                  
                  17,930
                  
                  
                  
                  5,707
                  
                  
                  
                  10,603
                  
                  
                  
                  1,620
                  
                  
                  NilSub-total
                  
                  
                  130,937
                  
                  
                  
                  18,545
                  
                  
                  
                  47,280
                  
                  
                  
                  65,112
                  
                  
                  NilOperating
      leases
                  
                  
                  65,735
                  
                  
                  
                  15,820
                  
                  
                  
                  26,646
                  
                  
                  
                  15,183
                  
                  
                  
                  8,086Total
      Contractual Obligations
                  
                  $
                  196,672
                  
                  
                  $
                  34,365
                  
                  
                  $
                  73,926
                  
                  
                  $
                  80,295
                  
                  
                  $
                  8,086





(1)
            The
      Company has estimated its interest obligation on its fixed and variable
      rate obligations.  For fixed rate debt where variable-to-fixed
      interest rate swaps are in place, the fixed interest rate was used to
      determine the interest obligation until the interest rate swaps
      mature.  For other fixed rate debt, the fixed rate was used to
      determine the interest rate obligation.  For variable rate debt
      the variable rate in place at March 31, 2009 was used to determine the
      total interest obligation.





In
addition to the above-noted contractual obligations, the Company, as at March
31, 2009, utilized the revolving credit facilities for standby letters of credit
of $21.0 million.  The letters of credit are used as collateral for
self-insured retention of insurance claims.





A
significant decrease in demand for our services could limit the Company’s
ability to generate cash flow and affect its profitability.  The
Company’s credit agreement contains certain financial maintenance tests that
require the Company to achieve stated levels of financial performance, which, if
not achieved, could cause an acceleration of the payment
schedules.  Management does not anticipate a significant decline in
business levels or financial performance and expects that existing working
capital, together with available revolving facilities, will be sufficient to
fund operating and capital requirements in 2009 as well as service the
contractual obligations.





OUTLOOK





The
first quarter of 2009 was a difficult quarter for Vitran financially as the
Company incurred its second consecutive quarter of net losses and second
quarterly net loss in 37 quarters.  Notwithstanding these financial
challenges, the Company saw its new integrated operating footprint take hold as
the LTL segment secured approximately $32 million of annual revenue
commitments.  The Logistics segment secured a new dedicated
distribution contract in California and continues to work its sales
pipeline.  The Company took further steps in April reducing wages 5%
across all employee groups and further streamlined its LTL operating
model.  Management believes these intiatives and the current sales
momentum in its LTL and Logistic segments will result in a return to
profitability.





On
a consolidated basis, the Company is now in position to reap the benefits of an
improvement in the economic environment should it materialize; however, should
the environment worsen, management will continually adjust its strategy and
tactics for the betterment of the Company, the employees and most importantly,
the shareholders.





QUARTERLY
RESULTS





(thousands of
      dollars
                      except
      per share
                      amounts)
                    
                    
                    2009
      Q1
                    
                    
                    
                    2008
      Q4
                    
                    
                    
                    2008
      Q3
                    
                    
                    
                    2008
      Q2
                    
                    
                    
                    2008
      Q1
                    
                    
                    
                    2007
      Q4
                    
                    
                    
                    2007
      Q3
                    
                    
                    
                    2007
      Q2Revenue
                    
                    $
                    139,635
                    
                    
                    $
                    154,235
                    
                    
                    $
                    198,605
                    
                    
                    $
                    195,990
                    
                    
                    $
                    177,507
                    
                    
                    $
                    174,310
                    
                    
                    $
                    171,927
                    
                    
                    $
                    170,144Income
      from operations
                    
                    
                    (2,854
                    )
                    
                    
                    (111,287
                    )
                    
                    
                    3,981
                    
                    
                    
                    8,048
                    
                    
                    
                    1,926
                    
                    
                    
                    2,750
                    
                    
                    
                    5,569
                    
                    
                    
                    9,073Net
      Income
                    
                    
                    (2,356
                    )
                    
                    
                    (79,002
                    )
                    
                    
                    2,066
                    
                    
                    
                    4,577
                    
                    
                    
                    1,134
                    
                    
                    
                    1,669
                    
                    
                    
                    3,121
                    
                    
                    
                    5,533Income
      per share:Basic
                    
                    $
                    (0.17
                    )
                    
                    $
                    (5.85
                    )
                    
                    $
                    0.15
                    
                    
                    $
                    0.34
                    
                    
                    $
                    0.08
                    
                    
                    $
                    0.12
                    
                    
                    $
                    0.23
                    
                    
                    $
                    0.41Diluted
                    
                    
                    (0.17
                    )
                    
                    
                    (5.85
                    )
                    
                    
                    0.15
                    
                    
                    
                    0.34
                    
                    
                    
                    0.08
                    
                    
                    
                    0.12
                    
                    
                    
                    0.23
                    
                    
                    
                    0.41Weighted
      average number of shares:Basic
                    
                    
                    13,498,159
                    
                    
                    
                    13,498,159
                    
                    
                    
                    13,493,757
                    
                    
                    
                    13,483,159
                    
                    
                    
                    13,465,357
                    
                    
                    
                    13,457,619
                    
                    
                    
                    13,475,685
                    
                    
                    
                    13,463,374Diluted
                    
                    
                    13,498,159
                    
                    
                    
                    13,498,159
                    
                    
                    
                    13,647,774
                    
                    
                    
                    13,630,974
                    
                    
                    
                    13,611,446
                    
                    
                    
                    13,621,272
                    
                    
                    
                    13,668,819
                    
                    
                    
                    13,661,467


16





Definitions
of non-GAAP measures:





(1)
            Operating
      ratio (“OR”) is a non-GAAP financial measure which does not have any
      standardized meaning prescribed by GAAP. OR is the sum of total operating
      expenses, divided by revenue. OR allows management to measure the Company
      and its various segments’ operating efficiency.  OR is a widely
      recognized measure in the transportation industry which provides a
      comparable benchmark for evaluating the Company’s performance compared to
      its competitors. Investors should also note that the Company’s
      presentation of OR may not be comparable to similarly titled measures by
      other companies. OR is calculated as
follows:




Three
      months ended March 31,
                                
                                2009
                                
                                
                                2008Total
      Operating expenses
                                
                                $
                                142,489
                                
                                
                                $
                                175,581Revenue
                                
                                $
                                139,635
                                
                                
                                $
                                177,507Operating
      ratio (“OR”)
                                
                                
                                102.0
                                %
                                
                                
                                98.9
                                %




(2)
            A
      shipment is a single movement of goods from a point of origin to its final
      destination as described on a bill of lading
  document.




(3)
            Weight
      represents the total pounds
shipped.




(4)
            Revenue
      per shipment represents revenue divided by the number of
      shipments.




(5)
            Revenue
      per hundredweight is the price obtained for transporting 100 pounds of LTL
      freight from point to point, calculated by dividing the revenue for an LTL
      shipment by the hundredweight (weight in pounds divided by 100) for a
      shipment.




(6)
            Revenue
      per total mile represents revenue divided by the total miles
      driven.




(7)
            The
      Company began to measure length of haul in July 2008, but believes the
      July length of haul is indicative of the 2008 first quarter for
      comparative purposes.  Length of haul is the sum of total miles
      derived between the zip code origin and zip code destination of shipments
      divided by the number of shipments.





Item
3. Quantitative and Qualitative Disclosures About Market Risk





The
Company is exposed to the impact of interest rate changes.  The
Company’s exposure to changes in interest rates is limited to borrowings under
the term bank facilities and revolving credit facilities that have variable
interest rates tied to the LIBOR rate.  As a majority of the Company’s
debt is tied to variable interest rates, the Company estimates that the fair
value of the long-term debt approximates the carrying value.




(in
      thousands of dollars)
                                          
                                          
                                          
                                          
                                          Payments
      due by periodLong-term
      debt
                                          
                                          Total
                                          
                                          
                                          2009
                                          
                                          
                                          2010
      & 2011
                                          
                                          
                                          2012
      & 2013
                                          
                                          ThereafterVariable
      RateTerm
      bank facility
                                          
                                          $
                                          46,000
                                          
                                          
                                          $
                                          8,000
                                          
                                          
                                          $
                                          28,000
                                          
                                          
                                          $
                                          10,000
                                          
                                          $NilAverage interest rate
(LIBOR)
                                          
                                          
                                          4.52
                                          %
                                          
                                          
                                          4.52
                                          %
                                          
                                          
                                          4.52
                                          %
                                          
                                          
                                          4.52
                                          %Term
      bank facility
                                          
                                          $
                                          1,609
                                          
                                          
                                          $
                                          805
                                          
                                          
                                          $
                                          804
                                          
                                          
                                          $Nil
                                          
                                          $NilAverage interest rate
(LIBOR)
                                          
                                          
                                          2.27
                                          %
                                          
                                          
                                          2.27
                                          %
                                          
                                          
                                          2.27
                                          %Revolving bank
      facility
                                          
                                          
                                          50,500
                                          
                                          
                                          Nil
                                          
                                          
                                          Nil
                                          
                                          
                                          
                                          50,500
                                          
                                          NilAverage interest rate
      (LIBOR)
                                          
                                          
                                          4.52
                                          %
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          4.52
                                          %
                                          NilRevolving bank
      facility
                                          
                                          
                                          743
                                          
                                          
                                          Nil
                                          
                                          
                                          Nil
                                          
                                          
                                          
                                          743
                                          
                                          NilAverage interest rate (CAD
      Prime)
                                          
                                          
                                          6.5
                                          %
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          6.5
                                          %Fixed
      RateCapital
      lease obligations
                                          
                                          
                                          14,155
                                          
                                          
                                          
                                          4,033
                                          
                                          
                                          
                                          7,873
                                          
                                          
                                          
                                          2,249
                                          
                                          NilAverage interest rate
                                          
                                          
                                          6.15
                                          %
                                          
                                          
                                          6.15
                                          %
                                          
                                          
                                          6.15
                                          %
                                          
                                          
                                          6.15
                                          %Total
                                          
                                          $
                                          113,007
                                          
                                          
                                          $
                                          12,838
                                          
                                          
                                          $
                                          36,677
                                          
                                          
                                          $
                                          63,492
                                          
                                          $Nil




17




The
Company uses variable-to-fixed interest rate swaps on its term and revolving
credit facilities with a notional amount of $62.6 million at March 31,
2009.  The average pay rate on the swaps is 4.58% and the average
receive rate is the three-month LIBOR rate, which is currently
1.22%.  To value the interest rate swaps, a discounted cash flow model
is utilized. Primary inputs into the model that will cause the fair value to
fluctuate period-to-period include the fixed interest rates, the future interest
rates, credit risk and the remaining time to maturity of the interest rate
swaps.  Management’s intention is to hold the interest rate swaps to
maturity.





The
Company is exposed to foreign currency risk as fluctuations in the United States
dollar against the Canadian dollar can impact the financial results of the
Company.  The Company’s Canadian operations realize foreign currency
exchange gains and losses on the United States dollar denominated revenue
generated against Canadian dollar denominated expenses.  Furthermore,
the Company reports its results in United States dollars thereby exposing the
results of the Company’s Canadian operations to foreign currency
fluctuations.  In addition, the Company’s United States dollar debt of
$80.1 million is designated as a hedge of the investment in the United States’
self-sustaining foreign operations.





Item
4. Controls and Procedures





a)
            As
      of the end of the period covered by this Quarterly Report on Form 10-Q,
      the Company carried out an evaluation, under the supervision and with the
      participation of Company management, including the Chief Executive Officer
      (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the
      design, implementation and operation of its “disclosure controls and
      procedures”, as such term is defined in Rule 13a-15(e) of the Exchange
      Act.  Based on this evaluation, the Company’s CEO and CFO have
      concluded that the Company’s “disclosure controls and procedures” are
      effective as of March 31, 2009 to enable the Company to record, process,
      summarize and report in a timely manner the information that the Company
      is required to disclose in submissions and filings with the SEC in
      accordance with the Exchange Act.





b)
            There
      were no changes in our internal control over financial reporting that
      occurred during the period covered by this report that have materially
      affected, or are reasonably likely to materially affect, the Company’s
      internal control over financial
reporting.








Part
II. Other Information





Item
1. Legal Proceedings





The
Company is subject to various legal proceedings and claims that have arisen in
the ordinary course of its business that have not been fully
adjudicated.  Many of these are covered in whole or in part by
insurance.  The management of Vitran does not believe that these
actions, when finally concluded and determined, will have a significant adverse
effect upon Vitran’s financial condition, results of operations or cash
flows.





Item
1A.  Risk Factors





See
Part 1A of the Company’s 2008 Annual Report on Form 10-K.





Item 2.  Unregistered Sale
of Equity and Use of Proceeds     -
-     None





Item 3.  Defaults Upon
Senior Securities      -
-     None





Item
4.  Submission of Matters to a Vote of Security Holders





a)
            On
      April 22, 2009 the Company held an Annual Meeting of
      Shareholders.




18





b)
            The
      following directors were elected with the indicated number of votes set
      forth below:





Nominee
                
                For
                
                WithheldRichard
      D. McGraw
                
                7,933,935
                
                1,952,761Richard
      E. Gaetz
                
                9,813,777
                
                73,519Anthony
      F. Griffiths
                
                8,754,150
                
                1,133,146John
      R. Gossling
                
                9,655,372
                
                231,924Georges
      L. Hébert
                
                9,655,372
                
                231,924William
      S. Deluce
                
                9,634,953
                
                252,343








c)
              The
      proposal for the ratification of the appointment of KPMG LLP as
      Independent Auditors for 2009 was voted on and approved at the meeting by
      the following vote:For:  9,872,873  Withheld:  14,421











Item 5. Other
Information        -
-        None





Item
6. Exhibits and Reports on Form 8-K





Exhibits





Exhibit
                  Number
                Description of
      Exhibit31
                Certifications
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated
      April 22, 2009.32
                Certifications
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated
      April 22, 2009.








SIGNATURE





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.




VITRAN
      CORPORATION INC.By:
              /s/SEAN
      P. WASHCHUKDate:  April
      22, 2009
              
              Sean
      P. WashchukVice
      President of Finance andChief Financial Officer(Principle
      Financial Officer)
  By:
                    /s/FAYAZ
      D. SULEMANDate:  April
      22, 2009
                    
                    Fayaz
      D. SulemanCorporate
      Controller(Principle
      Accounting Officer)







19