UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              Washington, DC  20549

                                                   FORM 10-K
(MARK ONE)
(X)      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES 
         EXCHANGE ACT OF 1934 
For the fiscal year ended December 31, 1997
         OR
( )      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES   
         EXCHANGE ACT OF 1934 
For the transition period ___________________ to _____________________

Commission file Number 33-29985-NY
 
                                       THE FREIGHT CONNECTION, INC. 
                     (Exact name of registrant as specified in its charter)

                     Delaware                   8980        11-2994672     
              (State orjurisdiction    (Primary Standard    (I.R.S. Employer
              of incorporation or       Industrial          Identification
              organization)             Classification      No.)
                                        Code Number)

                       12900 Dupont Circle, Tampa, Florida 33626         
                       (Address of principal executive offices)

Registrant's telephone number, including area code:   (813) 854-1500  
     
Securities registered pursuant to Section 12(b) of the Act:   None

Securities registered pursuant to Section 12(g) of the Act:   None

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months, and (2) has been subject 
to filing requirements for the past 90 days.  YES    X     NO             

Indicate by check mark if disclosure of deliquent filers pursuant to Item 405 
of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.   ( )

As of March 27, 1998, the aggregate market value of the voting
stock held by non-affiliates of the Registrant was approximately $ 785,400

As of March 27, 1998, the number of shares of Common Stock outstanding was
4,825,630






                                         THE FREIGHT CONNECTION,INC.
                                              REPORT ON FORM 10-K
                                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997  
                              
                                                       


                                               TABLE OF CONTENTS


                                                    PART I

Item 1.          Business

Item 2.          Properties

Item 3.          Legal Proceedings 

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

                                                    PART II

Item 5.          Market for the Registrant's Common Equity and Related         
                        Stockholder Matters

Item 6.          Selected Financial Data 

Item 7.          Management's Discussion and Analysis of Financial Condition
                  and Results of Operations

Item 8.          Financial Statements and Supplementary Data 

Item 9.          Changes in and Disagreements with Accountants on Accounting
                          and Financial Disclosure 


                                                   PART III

Item 10.         Directors and Executive Officers of the Registrant;
                  Compliance with Section 16(a) of the Exchange Act

Item 11.         Executive Compensation

Item 12.         Security Ownership of Certain Beneficial Owners and
                          Management 

Item 13.         Certain Relationships and Related Transactions

                                                    PART IV

Item 14.         Exhibits, Financial Statement Schedules and Reports on 
                          Form 8-K 

Signatures







Item 1.          Business
                                                       

The Company: Organization and Changes of Control

         The Company was organized under the laws of the State of Delaware on
December 16, 1987, under the name Taylor Equities, Inc. ("Taylor").  The Company
was formed as a "blank check" company, with its sole purpose being to offer its
stock to the public in a public offering and thereafter use the proceeds to find
an acquisition or merger candidate.  On December 23, 1991, Taylor entered into
an Agreement and Plan of Merger (the "Merger Agreement") with The Freight
Connection, Inc., ("FCI") a Florida corporation organized in October 1983 
("FCI") by Michael Jackson, former President of the Company, under the name 
"Expert Freight of Tampa, Inc."  FCI was organized as an intermodal marketing 
company and carried on that business until its combination with Taylor, when 
FCI was dissolved.  The Company's name was changed from Taylor Equities, Inc., 
to The Freight Connection, Inc., and the officers and directors of FCI became 
the officers and directors of the Company.   As part of the initial public 
offering, Taylor issued Class A and Class B warrants which expired on 
February 12, 1997.

         On July 14, 1993, Vitran, a corporation organized under the laws of the
Province of Ontario and having a principal place of business at 70 University
Avenue, Suite 350, Toronto, Canada, M5J 2M4, acquired 3,218,030 shares of the
Company's Common Stock, and a warrant to purchase an additional 1,536,970 shares
of the Company's Common Stock.  Vitran is a North American multi-divisional
operating company providing services to the freight and environmental industries
with over 1,500 employees at seventy-five locations in Canada and the United
States.  Vitran's Freight Services Group, of which the Company is a part,
provides a complete range of services for the movement of freight throughout the
continent, utilizing both highway and rail modes.  Services include less than
truckload, full load, dedicated contract carriage, warehousing and inventory
management.  Vitran solicits business between the United States and Canada as an
agent for the Company through a Vitran sales office in Toronto.  Vitran and the
Company have an agreement that all intermodal trans-border rail shipments shall
be written by the Company, with Vitran's receiving an agency commission from the
Company for such business.  Trans-border over-the-road shipments may be made by
the Company or other Vitran subsidiaries, depending on the type of service
required by the shipper of such freight.  Each shipper has unique requirements
for the movement of its freight, including time, shipment size and volume, and
the shipper's inventory carrying costs.  Vitran's common stock is traded on the
Toronto Stock Exchange under the symbol VTN.A and on NASDAQ under the symbol
VTNAF.  See Item 13 of this Report.

          Vitran acquired its shares of Common Stock pursuant to a subscription
agreement with the Company, which agreement required the Company to issue to
Vitran a warrant for the purchase of 1,536,970 shares of Common Stock at a price
of $.650631 per share exercisable through July 31, 1997.  In exchange for said
3,218,030 shares and stock purchase warrant, Vitran paid the Company $1,000,000,
of which $698,093.15 was paid in cash and $301,906.85 was paid by the repayment
to Vitran of a $300,000 principal amount note, together with interest of
$1,906.85, due Vitran by the Company.  The Company incurred that note obligation
to Vitran on June 15, 1993, as a bridge loan made pending Vitran's equity
investment consummated July 14, 1993.   The stock purchase warrant expired on
July 31, 1997 as scheduled.

During 1997, Vitran purchased an additional 700,000 shares of the Company's
common stock, changing its ownership to 3,918,030 shares, or 81.19% of the
Company's outstanding common stock.


The Intermodal Industry

         The Company provides intermodal transportation services and operates as
an intermodal marketing company. ("IMC").  Intermodal transportation involves 
the movement of freight by more than one mode of transportation, principally 
by truck or a combination of truck and rail. 

         For freight moving in excess of 500 miles, intermodal shipping often
represents a cost- effective alternative to over-the-road trucking.  The Company
includes as its target market, freight which is currently being shipped via
intermodal transportation as well as freight moving in excess of 500 miles via
for-hire trucking companies and private trucking fleets.  According to 
statistics reported by the Intermodal Association of North America, ("IANA") 
intermodal and truck revenue rose from $4.13 billion in 1996 to 4.76 billion, or
a growth of 14.5%.  Of this, truck revenues grew by 34.8% and intermodal 
revenue growth was 5.9%. (1)

         Intermodal freight is divided equally into shipments generated
domestically and those generated by the import/export market, with international
movements slightly exceeding domestic traffic.  Traditionally, the domestic
shipments have been long-haul truck movements, principally truckload.  
Intermodal has primarily attracted long-haul freight of 700 miles to 1,000 
miles or more; in some corridors, intermodal can be cost effective for 
distances as short as 500 miles.  

         During the 1980's and 1990's, the United States rail industry
experienced substantial consolidation through the merger of several railroads. 
The larger railroads disposed of less profitable short lines, allowing the
railroads to invest heavily to upgrade roadbeds, increase tunnel clearances,
build larger intermodal terminal facilities and improve their equipment and
technologies.  These improvements helped to reduce transit times and improve
service, reduced freight and equipment damage, and allowed for greater
efficiencies through the cross-country movement on double stack container 
trains.  Intermodal became even more competitive over this same period due to 
higher operating costs for the long-haul for-hire trucking companies, 
particularly for shipments travelling long distances.  During the latter part of
1997, there were several service issues surrounding the railroads which made 
highway brokerage a viable alternative in order to ensure on-time delivery to 
customers.   

         Due to the service issues surrounding the railroads, highway brokerage
has been gaining increased market share as mentioned above.  According to IANA,
for the first time since reporting data, truck brokerage represented more than
50% of the total shipments generated by IMC's. (1)  As a result of these
statistics and to remain competitive, the Company has made an effort to expand
its truck brokerage division.  


------------------                  
(1)  IANA IMC Market Activity Report, Intermodal Association of
North America, February 1998.
------------------

         In January 1998, a seasoned truck brokerage manager was hired to 
oversee the highway brokerage division which is based in the Atlanta, Georgia 
office.   This broker brought with him an established base of quality 
carriers.  As a result, the Company is able to provide cost effective 
alternatives to intermodal transportation.  

         IMCs have created additional opportunities for intermodal shipping by
providing a full door-to-door service to their clients at a price and service
level that would not be available to the shipper on its own.  IMCs assist the
railroads in balancing freight originating in or destined to specific geographic
regions, resulting in improved asset utilization.  IMCs provide value to 
shippers by passing on certain economies of scale by being volume purchasers 
of rail and drayage service, providing access to a large equipment pool, 
consolidating each carrier's invoice into one single invoice and handling the 
logistics of an intermodal move.

         Historically, establishing an IMC was easy because of the low capital
cost required to enter the carrier business.  However, in the last few
years the railroads have restricted the number of IMCs with which they will
enter into wholesale contracts.  They increasingly deal only with those that
can deliver certain volumes, and have in most cases required the posting of
financial guarantees before they will extend credit.  In addition, market
conditions require that an IMC be able to demonstrate to carriers and shippers
its ability to interface with customers and carriers electronically.  These
requirements limit the ability of start-up IMCs to enter the market and may 
force small IMCs out of the market if they are unable to continue to meet these
requirements.  The Company believes that this trend will be advantageous to the
Company.  The Company believes that its financial resources, staff, and computer
hardware and software are sufficient to offer substantially the same or better
services than any of its competitors, and that the Company is able to compete
effectively with any other company engaged in its business.


         
Operations
         
         The Company's services include the tracking of its customers' freight
in- transit, the daily reporting through electronic means of each load's status,
expediting each shipment to ensure it meets its schedule, and the consolidation
of all freight bills within a movement into a single door-to-door invoice,
regardless of how many carriers are utilized.  The Company contracts with all
major U.S. railroads along with drayage carriers and independent stack train
operators.  These contracts provide for volume discounts, the ability to
negotiate special commodity pricing and in some instances early payment
incentives in the form of rebates.

         The Company believes that a primary component of its business strategy
is the continued improvement of its software and other technology to enhance its
information processing for its intermodal transportation services.  The Company
believes that a significant portion of its future growth will depend on its
information technology and accordingly it continues to concentrate in this 
area.  The Company has several customers online with full electronic data 
interchange of information from a shipment's original loading through 
delivery at destination.
         
         The Company is primarily a provider of intermodal transportation
services, yet it continues to expand its service capabilities as customers
increasingly outsource their transportation needs.  The Company now performs
logistics functions for a small number of its clients and intends to expand
its logistics capabilities and offer new or additional services to meet or 
exceed customer demands.  These logistics functions include a more comprehensive
transportation management program, third party warehousing, arranging for
delivery to multiple locations over several states and other customized 
logistics services.

         
The Company's Carrier Vendors

         An important element of the Company's strategy is to
continue to build and strengthen its close working relationship with each of the
major intermodal railroads in the United States, Canada and Mexico. The Company
has contracts with each of the following Class 1 railroads;

                  Santa Fe/BN                               
                  Illinois Central
                  Norfolk Southern                                            
                  Union Pacific/Southern Pacific
                  APL Stacktrain Service
                  Conrail 
                  CSX Transportation                               
 

         These contracts govern the terms of transportation with
each railroad, which include payment terms and the various services to be
provided by each rail.  The Company negotiates with each railroad in an effort
to provide the best quality service at a favorable price to its client base. 
These contracts usually have staggered renewal dates at which time the Company
revisits its volume with that rail and seeks to establish even more favorable
contracts for the continuing years, including rebates for volume shipments.  The
Company is also able to negotiate special commodity pricing which provides price
discounts on certain commodities based on competitive factors.  The special
pricing quotations are designed, in part, by the railroads to attract new
business that the railroads have not previously handled.  In addition, certain
of these railroads offer rebates for fast payment of their invoices.

         The Company also sees its local cartage ("drayage") and
over-the-road carrier base as an integral part of its operations, since the
Company's ability to perform on-time pick up and delivery of product is 
partially based on the level of service provided by these carriers.  
Accordingly, the Company has quality programs in place which monitor the 
performance of each of its carriers.  Service reports are generated monthly 
and forwarded to each carrier, at which time, if service failures have 
occurred, a corrective action is taken by both the Company and the carrier to 
improve service levels.  The Company's data base of carriers is maintained 
and updated regularly to ensure that only approved carriers with adequate 
insurance are available for use.  The Company continues to seek out quality 
carriers throughout North America to enhance its ability to provide faster 
service and facilitate the Company's expansion.  


The Company's Customers

         
         The Company performs credit checks on all potential customers to ensure
that they are credit worthy and are able to meet the payment terms established
by the Company.
 
         The Company has transportation agreements with various companies to
perform substantial portions of their transportation needs on agreed-upon
pricing terms for specified routes.  Many of these agreements are verbal and
non-binding. Others are binding and in written form, but are cancelable on short
notice.  All of the Company's agreements are based upon the Company's price
quotes as accepted by its customers. The quotation document sets forth all of 
the terms of the agreement between the parties and includes a liability 
disclaimer (see "Liability Issues," below).  Quotation documents establish 
pricing and delivery terms of freight, and are often used by shippers on a 
continuous basis. All agreements based on the Company's written quotations 
can be cancelled by either party at any time prior to shipment without penalty.

         Intermodal transportation tends to be most beneficial for customers
shipping full truckloads longer than 500 miles.  Many of the Company's customers
in the automotive, scrap metal, and spirit industries operate within a multi-
divisional environment.  The Company does business with more than one division
of several of its principal customers, and is dependent on the various divisions
of such companies for a substantial portion of its business.  As its agreements
with those customers are made on a divisional rather than a corporate basis,
management believes it is not likely that the Company would lose all of the
business of any of its principal customers if it were to lose the business of 
any one of their divisions.    

         During the year ended December 31, 1997, the Company had sales to 
various divisions of one major customer, an automobile manufacturer, which 
amounted to 61% of total sales.  The Company conducts its business with
this customer on a multi-divisional basis and the percentage provided in the
preceding sentence is for the aggregate of all divisions of this customer.  The
Company has separate agreements with each division and the percentage of 
business represented by each division is substantially less than the 
corporate aggregate.  The maximum percentage of sales by any one division is 
approximately 9% of the Company's total sales.


Sales and Marketing

         The Company believes that developing long-term relationships with its
client base is crucial to its continued growth.  By developing these long-term
relationships, the Company is able to better understand its customers' needs and
is then able to customize its services to each client.  The Company has an
extensive data base of existing and potential new clients to which it 
continually markets its services.

         The Company undertakes a variety of marketing initiatives, including 
the use of direct surveys on a client-by-client basis to determine new or 
additional customer needs and meet the demand.  An approach to a new client 
generally involves the assessment of that customer's transportation 
requirements.  In making its analysis, the Company reviews the customer's 
business patterns and determines if the customer is maximizing its 
transportation dollar.  The Company also seeks to integrate itself into the 
customer's environment to determine if there are additional logistic services 
the Company can provide.  The objective of the Company's analysis is to 
market the Company's services by presenting to the customer a program of 
reducing the customer's overall costs while offering the customer a superior 
level of transportation service.

         The Company regularly surveys its customers in order to continually
receive evaluations of the Company's performance, keep abreast of customer
needs, and develop leads for new business.

         In an effort to further the Company's national exposure, the Company
opened sales offices in Atlanta, Georgia, and Los Angeles, California during
1996, and San Francisco, California in February 1998.  In addition, the Company
utilizes a combination of outside commissioned sales agents and internal
marketing staff to support its sales efforts.  Currently the Company has
commissioned agents in Melbourne, Florida, Atlanta, Georgia, Boston,
Massachusetts, Portland Oregon, and Salt Lake City, Utah.  A unit of Vitran 
based in Concord, Ontario, Canada represents the Company as its Canadian 
agent.  Each outside sales person receives a commission based on a percentage of
the fee generated on each movement.  The Company is currently developing several
commission sales agreements in all major markets within North America.

         In November 1996, the Company obtained its ISO-9000 certification, 
which the Company believes will assist its national and international sales 
efforts.  ISO-9000 is a series of international standards for quality 
management systems.  The Company intends to obtain national exposure through 
the use of advertising, periodic press releases and promotional mailings.


Computer Systems

         The Company has invested in the purchase and development of computer
programs that provide pertinent tracking information to its customers on a daily
basis.  The Company has also helped develop for its own use a program which
allows for the integration of scheduling, pricing and quotations, routing,
dispatch, tracing, billing and accounting systems for its internal operations.

         With the Company's computer systems capability described in the
preceding paragraph, the Company can advise its customers on an hourly basis
of the exact location of any shipment.  Every customer receives a daily shipment
tracking report which provides the location of each shipment in transit within
the United States, Mexico and Canada.  This technology permits the Company to
solve problems with customers' shipments in many instances before they cause any
delay to the shipper.

         All of the Company's offices are networked into the system so that
up-to-date information is always available for the customers of each location.


Liability Issues

         Brokers such as the Company do not generally assume liability for loss
or damage to freight.  Since the Company operates as a transportation broker
(that is, a company that finds a carrier to haul a shipper's freight) of
property and a shipper's agent, it does not take possession of the freight and
is therefore not liable for the carrier's failure to perform or the carrier's
negligent performance.  The Company has a liability disclaimer as a part of
each freight agreement signed with its customers.  This liability disclaimer
sets forth the Company's legal responsibilities and states that since the 
Company is acting as a transportation intermediary and not a carrier, it will 
not be liable for loss or damage resulting from the transportation of freight.


         Although as a broker it is not responsible for loss of or
damage to freight, the Company will assist the shipper as its agent in the
claim collection process.  The Federal Highway Administration does not require
a broker to carry cargo insurance, but it does require a broker's surety bond of
$10,000, the purpose of which is to show financial responsibility and provide
surety for arrangements with carriers and shippers.

Competition

         The transportation services industry is highly competitive.  The 
Company competes against other IMCs, as well as brokers of freight, logistic 
service companies and with railroads that attempt to market their own intermodal
services.  The Company also completes with over the road carriers who have
entered the intermodal market by converting their long-haul traffic to
intermodal.  Competition is based primarily on freight rates, quality of 
service, reliability and transit times.

         The Company competes with several other IMCs, such as The Hub Group,
Mark VII Transportation, AP Distribution, Alliance Shippers and GST Corporation,
and numerous small regional and local firms.  Many of these firms have larger
gross revenues than the Company, however the Company believes that it is
an established IMC able to meet the requirements of railway carriers and 
shippers and that it is competitive with the largest IMCs.  With the trend 
towards further consolidation in the industry, the Company believes that its 
financial stability and its continual investment in information systems will 
uniquely position the Company for continued growth both through external 
sales development and the possible acquisition of other IMCs.


Employees 

         As of the date of this Report, the Company has twenty-six full-time
employees engaged in performing executive, administrative, marketing and 
clerical duties.  These employees are located in Tampa, Florida, Atlanta, 
Georgia, and San Francisco, California.  The Company has seven people 
performing sales and administrative services in Los Angeles, California.  
These people are paid through an outside agency.  Management intends to add 
employees throughout the coming year, as it deems necessary, in order to 
provide continuous quality service.


Executive Officers of the Registrant

         As of the date hereof, there are two executive officers of the 
Company.  Richard E. Gaetz serves as the President and Chief Executive 
Officer of the Company.  Mr. Gaetz has served in those capacities since October
11, 1996 at which time he replaced Michael Jackson.  Geoff Duncan is the
Executive Vice President and Chief Operating Officer.  He has served in those
capacities since November 15, 1996. Prior to that date, Mr. Duncan's positions
did not exist at the Company.  For information as to Mr. Gaetz and Mr. Duncan's
prior business experience, see Item 10 of this Report. 


Environmental Matters

         The Company does not believe that compliance with federal, state and
local laws and regulations which have been enacted or adopted regulating
the discharge of materials into the environment will have any material adverse
impact upon the capital expenditures, earnings, or competitive position of the
Company.


Item 2.          Properties

         The Company's corporate headquarters are located in Tampa, Florida.  
The Company leased approximately 5,000 square feet at 12900 Dupont Circle, 
Tampa, Florida for the year ended December 31, 1997; 2,808 square feet was 
useable office space and the remainder was warehouse space which could be 
renovated upon expansion.  The annual rent was $41,047 for the year ended 
December 31, 1997.  Upon expiration of the lease on January 31, 1998, the 
Company signed a new lease for a period of two years.  This lease is also for 
5,000 square feet, and included the conversion of 1,392 square feet of 
warehouse space into office space.  Management feels that the resulting 4,200 
square feet of useable office space is sufficient to meet the expansion goals 
of the Company in the next two years.  At the expiration of this lease in the 
year 2000, the Company will re-evaluate its space needs and determine whether to
move to a larger facility or renew its existing lease arrangement. 

         The Company entered into a three year lease with a Vitran subsidiary 
for office space in Atlanta, Georgia on May 10, 1997.  Rent expense incurred 
under this lease for the year ended December 31, 1997 was $8,000.   Due to the
expansion of the truck brokerage division in Atlanta, Georgia, the Company will
require additional office space during 1998.

         The Company entered into a one year lease on August 25, 1997 for an
executive suite in Los Angeles, California.  Prior to the lease, the Company
rented a smaller space on a monthly basis in the same building.  This lease will
be reviewed at the end of its term to determine if additional space is 
required.  Rent expense under this lease for the year ended December 31, 1997 
was $10,800. 

         In February 1998, the Company signed a two year lease in San Francisco,
California for its new sales office.
 
         The Company's offices in Atlanta, Georgia, Los Angeles, California and
San Francisco, California are sales offices with operations support.  The
executive offices and the accounting offices are located in the Tampa, Florida
facility. 

         

Item 3.          Legal Proceedings

         On June 14, 1993, the Company entered into an agreement with a
stockholder and his wife to liquidate their investment in the Company.  As 
part of the agreement, the former President personally guaranteed that the 
stockholder would receive no less than $360,000 from the sale of their shares in
the Company.  The Company agreed to issue up to an additional 35,000 shares to
the stockholder in the event that the proceeds were less than $360,000.

         In November 1996, the Company, its former President, and
its directors were sued by the above mentioned shareholder for civil damages
which the plaintiff alleges arose from breach of the June 14, 1993 agreement. 
The suit was filed in Hillsborough County, Florida, Circuit Court, in a case
captioned Robert Johnston v. The Freight Connection, Inc., Michael Jackson,
Richard E. Gaetz, Albert Gnat, and Richard D. McGraw (Case No. 96-07867).  On
July 7, 1997, the plaintiff filed a voluntary notice of dismissal with prejudice
against all of the defendants, including the Company.  Prior to the dismissal,
on July 3, 1997, the Company and Michael Jackson entered into a settlement
agreement pursuant to which (i) the Company and Mr. Jackson agreed to exchange
mutual general releases; (ii) Mr. Jackson agreed that he would not, for a period
of approximately one year, solicit customers of the Company or employees of the
Company or its parent company, Vitran Corporation Inc.; (iii) Mr. Jackson agreed
that the exercise period of his options as to 80,000 shares of the Company's
common stock expire August 22, 1999; (iv) Mr. Jackson agreed to repay a $14,000
loan to the Company; and (v) Vitran Corporation Inc. agreed to purchase from Mr.
Jackson 600,000 shares of the common stock of the Company for consideration of
$450,000.  As a condition of the settlement agreement, Mr. Jackson was required
to settle the captioned litigation as to all defendants, including the Company,
which was accomplished on July 7, 1997.


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

         No matter was submitted to a vote of security holders during the fiscal
year covered by this Report.


                                                    PART II

Item 5.          Market for the Registrant's Common Equity and Related
            Stockholder Matters
         
                 The Company's Common Stock is quoted on the NASD electronic
bulletin board and in the "pink sheets" under the symbol FTCN.  There has 
never been an active trading market for the Company's Common Stock, nor does 
one now exist.  

         The National Quotation Bureau, Inc., has advised the Company that the
following bid quotations have been reported:
                                                                
                                                          Bid Prices
         Period                                       High          Low 

         January 1 - March 31, 1996                    1.00         .06
         April 1 - June 30, 1996                       1.00        1.00
         July 1 - September 30, 1996                   1.00         .75
         October 1 - December 31, 1996                  .88         .38
         January 1 - March 31, 1997                     .75         .63
         April 1 - June 30, 1997                       1.38         .50
         July 1 - September 30, 1997                    .88         .75        
         October 1 - December 31, 1997                  .75         .63


         Such quotations reflect inter-dealer prices, without retail mark-up,
mark- down or commission.  Such quotes are not necessarily representative of
actual transactions, or of the value of the Company's securities, and are
in all likelihood not based upon any recognized criteria of securities 
valuation as used in the investment banking community.

         The Company has been advised that three member firms of the NASD are
currently acting as market makers for the Common Stock.  However, there are no
meaningful trading transactions currently for the Company's stock, nor have 
there ever been any such transactions.  
The Company believes that the absence of 
such transactions is due in substantial part to its shares of Common Stock 
being held by few individuals.  There is no assurance that an active trading 
market will develop which will provide liquidity for the Company's existing 
shareholders.  

         Neither the Company's certificate of incorporation, its by-laws, nor 
any agreement to which it is a party restricts the payment of dividends.  
However, a loan agreement established between Republic Bank, St. Petersburg, 
Florida and the Company contains certain covenants concerning the Company's net 
worth and ratio of debt to net worth.  Payment of dividends could be restricted 
if such payment would cause the Company to violate either of these covenants.  
The Company has not paid any dividends on its Common Stock. 

         As of March 18, 1998, there were twenty-seven holders of record of the
Company's Common Stock.  Certain of the shares of Common Stock are held in
"street" name and may, therefore, be held by several beneficial owners.


Item 6.          Selected Financial Data


         The following data illustrates the results of operations for the years
ended December 31, 1995, 1996 and 1997, respectively.  The data has been derived
from and should be read in conjunction with, the Company's Financial Statements
and related notes included elsewhere in this Report.  All data has been derived
from the Company's audited financial statements.


                        Year Ended        Year Ended        Year Ended
                        December 31,      December 31,      December 31,
(000's omitted)         1995              1996              1997

Freight income          $20,014           $22,173           $26,333
Freight expense          18,044            20,184            23,947

Gross profit              1,970             1,989             2,386

Selling, general
 and administrative
 expenses                 1,142             1,486             1,673

Depreciation and
  amortization               99                62                69

Income from
  operations                729               441               644

Other income
  (expenses)                  4                10                21

Income before
  taxes                     733               451               665

Income tax
  expense                   285               180               200

Net income              $   448           $   271           $   465

Net income per share    $   .09           $   .06           $   .10

Financial Position

Working capital         $ 1,233           $ 1,405           $ 1,899 

Total Assets            $ 3,295           $ 3,759           $ 4,657

Stockholders'
  Equity                $ 1,444           $ 1,698           $ 2,163

                  

                                                                              
Item 7.     Management's Discussion and Analysis of Financial Condition and
Results of Operations 

         The following discussion and analysis should be read in conjunction 
with the Financial Statements appearing elsewhere in this Report.  The 
information which follows includes results of the years ended December 31, 
1995, 1996 and 1997, respectively.


Liquidity and Capital Resources

         
         The Company has increased its working capital from $1,404,775 at
December 31, 1996 to $1,899,316 at December 31, 1997, an increase of 35.2%.  The
increase is primarily due to the net income generated by the Company.  The
Company intends to use this working capital to expand its operations by 
opening sales offices in various geographic locations.     

         The cash position of the Company at December 31, 1997 was $1,285,929
compared to $173,911 at December 31, 1996.  The rise in cash can be attributed
to the efforts made by the credit department to collect monies owed the 
Company on a timely basis.  In addition, at December 31, 1996, one of the 
Company's customers had a substantial amount of past-due balances, the 
majority of which was collected during 1997.  

         Concurrent with the rise in cash was a decrease in accounts 
receivable.  The accounts receivable balance at December 31, 1997 and 1996, was 
$3,025,938 and $3,233,861, respectively, a decrease of 6.4%.  This is in 
contrast to the rise in the accounts payable balance from $2,018,059 to 
$2,425,517 between December 31, 1996 and 1997, respectively, an increase of 
20.2%. Generally, as revenues increase, accounts receivable and accounts payable
will also increase.  Due to the significant collection of past due balances 
during 1997, even though revenues increased by 18.8%, the accounts receivable 
balance decreased.

         The Company had a net increase in cash from operations of $1,163,423 
and $164,687 for the years ended December 31, 1997 and 1995, respectively.  
For the year ended December 31, 1996, the Company had a net reduction in cash 
from operations of $600,179.  The net increase in cash from operations for 
the year ended December 31, 1997 was primarily due to the net income of 
$464,671 for the year, combined with the decrease in the accounts receivable 
balance and the increase in the accounts payable balance.  The net reduction 
in cash from operations at December 31, 1996 was primarily due to the 
significant increase in the accounts receivable balance from December 31, 
1995, partially offset by the rise in accounts payable and the net income 
produced during the year.  The net increase in cash from operations for the 
year ended December 31, 1995, was due primarily to the net income generated, 
combined with the rise in income taxes payable and offset by the rise in 
accounts receivable.  

         The Company continues to purchase assets as it deems necessary.  For 
the year ended December 31, 1997, the Company purchased $51,405 in fixed 
assets, the majority of which was computer software and equipment.  For the 
year ended December 31, 1996, the Company expended $165,712 on fixed assets, 
including $81,995 for the purchase of an IBM AS200.

         Stockholders' equity was $2,162,947 at December 31, 1997, up 
$464,671,or 27.4% from December 31, 1996.  Earnings per share at December 31, 
1997 were $.10, compared to $.06 and $.09, at December 31, 1996 and 1995, 
respectively.

         In compliance with provisions in the Company's contracts with certain
railroads, the Company has obtained an unsecured surety bond in the amount of
$150,000.  In addition the Federal Highway Administration requires the Company
to maintain a surety bond in the amount of $10,000, which is secured by a
certificate of deposit.

         On August 18, 1997, the Company renewed its revolving line of credit
with Republic Bank, St. Petersburg, Florida, in the amount of $2,000,000.  
This line is secured by the Company's accounts receivable.  The Company 
intends to use the line to provide cash required by the Company's acceptance 
of new business and for the possible opening of new sales offices.  The 
Company does not have any outstanding bank debt as of the date of this 
Report, nor did it have any bank debt at December 31, 1997.  

         At December 31, 1997 and 1996, the Company did not have any capital
lease obligations.

Results of Operations

         Revenues for the year ended December 31, 1997 were $26,333,344, up
18.8%, or $4,160,405, from the year ended December 31, 1996 and up $6,319,369 or
31.6% from the year ended December 31, 1995.  Revenues for the year ended
December 31, 1996 were up 10.8% from December 31, 1995.  The Company is
increasing revenues by (i) obtaining additional business from existing 
customers (ii) targeting new customers through marketing efforts and (iii) 
opening additional sales offices as opportunities arise.  The Atlanta, Georgia 
office and the Los Angeles office 
contributed to revenues for the entire year in 
1997, as compared to 1996 when each office produced revenues for only a 
portion of the year.  Revenues for the years ended December 31, 1997, 1996 and 
1995 included accounts receivable credit balances in excess of 12 months less 
certain allowances resulting in a net increase to revenues ("additional income")
of $113,356, $78,000 and $283,000, respectively.

         The gross profit margin was 8.7%, 8.6%, and 8.6% (before additional
income), for the years ended December 31, 1997, 1996 and 1995, respectively.  
The industry is extremely competitive, resulting in only marginal growth in the 
gross profit margin.  Additionally, more of the Company's business was obtained 
through commissioned agents, resulting in less margin for the Company.  The 
Company is continuing to expand its highway brokerage division, which should 
improve the gross profit margin as these moves generally offer higher profit 
margins.   
  
         The Company's selling, general and administrative expenses ("SG&A") 
were $1,672,807, or 6.4% of revenues for the year ended December 31, 1997, 
compared to $1,486,167, or 6.7% of revenues for the year ended December 31, 1996
and $1,142,621, or 5.7% of revenues for the year ended December 31, 1995.  In 
1996, the Company incurred various start-up expenses associated with the 
opening of new sales offices.  This resulted in a higher SG&A percentage.  
The Company's goals are to continue to improve administrative efficiencies 
within its various offices.

         The pre-tax income of the Company was $664,415, or 2.5% of revenues 
for the year ended December 31, 1997, compared to $450,962, or 2.0% of revenues,
and $733,367, or 3.7% of revenues, for the years ended December 31, 1996 and 
1995, respectively.  The pre-tax income in 1996 was impacted by the net 
start-up losses of $147,346 for the new sales offices.  The large pre-tax 
income in 1995 was primarily due to the $283,000 of additional income.

         Income tax expense for the years ended December 31, 1997, 1996, and
1995, was $199,744, $180,000, and $285,000, respectively.  The tax expense 
for the year ended December 31, 1997 was reduced by the Company's booking of 
a deferred tax asset in the amount of $58,256.  

         Net income for the years ended December 31, 1997, 1996, and 1995, was
$464,671, $270,962, and $448,367, respectively.    The Company had been 
profitable during these years due to its efforts to increase volume, maintain 
margins and control SG&A expenses.  

         The Company will continue to market its services and promote its 
ISO 9002 registration.  In addition it will strive to open sales offices and 
obtain sales representation in the major geographic areas.  As part of this 
commitment to growth, the Company opened a sales office in San Francisco, 
California in 1998 and obtained sales representation in Portland, Oregon and 
Salt Lake City, Utah. 



Item 8.          Financial Statements and Supplementary Data

         
Independent Auditors' Report

To the Shareholders and Board of Directors
The Freight Connection, Inc.

We have audited the accompanying balance sheets of The Freight Connection, Inc.
as of December 31, 1997 and 1996, the related statements of income, 
stockholders' equity and cash flows for the years ended December 31, 1997, 
1996 and 1995.  These financial statements are the responsibility of the 
Company's management. Our responsibility is to express an opinion on these 
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audits to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial 
statements presentation.  We believe that our audits provide a reasonable basis 
for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of The Freight Connection, Inc.  
as of December 31, 1997 and 1996, the results of its income and its cash 
flows for the years ended December 31, 1997, 1996 and 1995, in conformity 
with generally accepted accounting principles.

/s/ Margolies, Fink and Wichrowski

February 4, 1998
Pompano Beach, Florida



                  THE FREIGHT CONNECTION, INC.
                         BALANCE SHEETS
                   DECEMBER 31, 1997 AND 1996



ASSETS

Current assets:                              1997           1996

 Cash and cash equivalents (Note 1)     $1,285,929     $  173,911
 Accounts receivable -trade, net of
  allowance for uncollectible accounts
  of $201,053 and $133,540, respectively
  (Notes 8 and 10)                       3,025,938      3,233,861
 Deferred Tax Asset (Note 7)                58,256
 Prepaid expenses and other receivables     23,556        57,485 

         Total Current Assets            4,393,679      3,465,257

Property and equipment (net of accumulated
  (depreciation) (Notes 1 and 2)           207,448        230,798

Deposits and other assets                   56,183         62,703

                                        $4,657,310     $3,758,758




LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
 Accounts payable and accrued expenses
 (Note 3)                               $2,425,517     $2,018,059
 Income taxes payable                       68,846         42,423

        Total Current Liabilities        2,494,363      2,060,482

Stockholders' Equity (Note 5)
 Common stock, $.001 par value;
  authorized 20,000,000 shares;
  4,825,630 shares issued and
  outstanding                                4,826          4,826
 Additional paid-in capital                918,982        918,982
 Retained earnings                       1,239,139        774,468
    
      Total Stockholders' equity         2,162,947      1,698,276

                                        $4,657,310    $3,758,758 
   
                         


                         The accompanying notes are an
                 integral part of these financial statements.





                         THE FREIGHT CONNECTION, INC.
                             STATEMENTS OF INCOME
                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


                              1997              1996         1995

Freight Income          $26,333,344       $22,172,939  $20,013,975
(Note 7)

Freight expense          23,947,680        20,184,096   18,043,660

Gross profit              2,385,664         1,988,843    1,970,315

Selling, general
 and administrative
 expenses                 1,672,807         1,486,167    1,142,621
Depreciation and
 amortization                68,691            61,809       98,927

Income from
  operations                644,166           440,867      728,767

Other income(expenses):
 Interest and 
  dividend income            28,598            21,227        16,805
 Interest expense           ( 8,349)          (11,607)      (11,775)
 Other                            -               475         (430)

 Total other income
   (expenses)                20,249            10,095        4,600

Income before income
   taxes                    664,415           450,962      733,367

Income tax expense
  (Notes 1 & 7)             199,744           180,000       285,000

Net income              $   464,671       $   270,962      $448,367

Net income per 
   share(Note 1)        $       .10       $       .06       $   .09

Weighted average
 shares outstanding       4,825,630         4,825,630     4,825,630       
                                                
         




                        The accompanying notes are an 
                 integral part of these financial statements.




                          THE FREIGHT CONNECTION, INC.
                       STATEMENT OF STOCKHOLDERS' EQUITY
                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

                      Common Stock            Additional
                      Number of     Par       paid-in     Retained          
                      Shares      Value        capital    earnings     Total 


Balance, 
January 1, 1995      4,815,430   $ 4,815     $910,443    $55,139      $970,397

Issuance of 
 common stock           10,200        11       25,489                   25,500

Net income year 
 ended December 
 31, 1995                    -         -            -    448,367       448,367
                                                                  
Balance
December 31, 1995    4,825,630     4,826      935,932    503,506     1,444,264

Refund of a portion
of the proceeds from
the issuance of common
stock                                         (16,950)                (16,950)

Net income year
 ended December
 31, 1996                    -         -            -    270,962       270,962

Balance
December 31, 1996    4,825,630     4,826      918,982    774,468     1,698,276

Net income year
 ended December
 31, 1997                    -         -            -    464,671       464,671

Balance     
December 31, 1997    4,825,630    $ 4,826     $918,982   $1,239,139 $2,162,947








                         The accompanying notes are an
                 integral part of these financial statements.






                          THE FREIGHT CONNECTION, INC.
                           STATEMENTS OF CASH FLOWS
                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



                              1997              1996              1995

Cash flows from operating
 activities:
  Net Income                  $464,671          $270,962          $448,367    


Adjustments to reconcile
 net income to net cash
 provided by(used in)
 operating activities:  
 Depreciation and 
   amortization                 68,691            61,809            98,927
 Deferred tax asset(net)       (58,256)
 Loss on disposal of 
   fixed assets                  6,064
Changes in assets and
 liabilities:           
 Accounts receivable           207,923       (1,218,672)          (386,196)
 Prepaid expenses and
   other receivables            33,929           34,955           ( 49,067)
 Deposits and other
   assets                        6,520           21,853           (  7,292)
 Accounts payable and
  accrued expenses             407,458          323,578           ( 77,139)
 Income taxes payable           26,423      (   94,664)            137,087

Total adjustments              698,752      (  871,141)           (283,680)

Net cash provided by
 (used in)operations          1,163,423    (   600,179)            164,687

Net cash used in 
 investing activities:
 Purchase of fixed assets       (51,405)   (   165,712)            (98,939)

Cash flows(used in)
 provided by financing
 activities:
  Return of capital to
   warrant holders                           (  16,950)
  Issuance of common stock                                          25,500
  Long-term capital 
   lease obligations                  -      (  18,797)            (46,031)
                                        
Net cash used in 
 financing activities                 -      (  35,747)            (20,531)

Net increase(decrease) 
 in cash and cash       
 equivalents                  1,112,018      ( 801,638)             45,217

Cash and cash 
 equivalents, beginning
 of period                      173,911         975,549            930,332

Cash and cash 
 equivalents, end of 
 period                     $ 1,285,929      $  173,911          $ 975,549
                       
Supplemental
 disclosure:
  Cash paid for interest     $    8,349        $    9,814        $ 11,775

  Cash paid for income
    taxes                     $  229,800        $  274,664        $146,500

                 



                         The accompanying notes are an
                 integral part of these financial statements.


                         THE FREIGHT CONNECTION, INC.
                         NOTES TO FINANCIAL STATEMENTS


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Business and basis of presentation

The Company operates as a transportation freight broker and coordinates both
truck and rail shipments from point of origin to delivery at destination for its
clients' freight shipments.  The Company is responsible for paying carriers for
hauling the freight and extends credit to its clients for the shipment.  The
Company's primary office facilities are located in Tampa, Florida with 
additional sales offices located in Atlanta, Georgia, Los Angeles, 
California, and Toronto, Ontario.


Cash equivalents

Cash equivalents are short-term, highly liquid investments readily convertible
to known amounts of cash and so near their maturity that they present 
insignificant risk of changes in value because of changes in interest rates.


Property and equipment

Property and equipment are carried at cost.  The Company provides depreciation
for financial purposes over the estimated useful lives of fixed assets using the
straight-line method.  Upon retirement or sale of fixed assets, their net book
value is removed from the accounts and the difference between such net book 
value and proceeds received is recorded in income.  Expenditures for 
maintenance repairs are charged to expense; renewals and improvements are 
capitalized.


Revenue recognition

The Company recognizes freight revenue, freight charges, and expenses when the
shipment leaves its point of origin.  Revenues are recorded net of allowances. 
Accounts receivable credit balances are taken into revenue after twelve months. 
Quick-pay rebates are recognized in the month earned, and volume rebates are
recorded monthly or annually per the individual contract agreement.


Fair value of financial instruments

The fair value of the Corporation's financial instruments such as accounts
receivable and accounts payable, approximate their carrying value.


Accounting estimates

The Management of the Corporation occasionally uses accounting estimates in
determining certain revenues and expenses.  Estimates are based on subjective as
well as objective factors and, as a result, judgement is required to estimate
certain amounts at the date of the financial statements.


Income taxes

The Company has adopted Statement of Financial Accounting Standard No. 109
"Accounting for Income Taxes" which requires an asset and liability approach to
financial accounting for income taxes.  Deferred income tax assets and
liabilities are computed annually for the difference between the financial
statement and tax bases of assets and liabilities that will result in taxable or
deductible amounts in the future, based on enacted tax laws and rates applicable
to the periods in which the differences are expected to affect taxable income. 
Valuation allowances are established when necessary to reduce deferred tax 
assets to the amount expected to be realized.  Income tax expense is the tax 
payable or refundable for the period, plus or minus the change during the 
period in deferred tax assets and liabilities.


Net income per share

Net income per share is computed by dividing net income by the average number of
common shares outstanding, increased by common stock equivalents determined 
using the treasury stock method.  For the years ended December 31, 1996 and 1995
outstanding warrants have not been reflected in the computation of earnings per
share because the market price of the common stock outstanding has not been in
excess of the warrant exercise price.  At December 31, 1997 all warrants have
expired.


2. PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1997 and 1996 consist of the following:

                                       1997              1996

Computer software                   $ 67,050          $ 43,050
Leasehold improvements                                   4,726
Office furniture and equipment       286,599           271,403

                                     353,649           319,179
Less accumulated depreciation        146,201            88,381

                                    $207,448          $230,798

Depreciation and amortization expense for the years ended December 31, 1997, 
1996 and 1995, were $68,691, $61,809, and $98,927, respectively.


3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses at December 31, 1997 and 1996 consist of
the following:

                                            1997               1996      

Accounts payable trade                    $2,130,646        $1,528,968
Accounts receivable credit balances          221,098           409,740
Accrued expenses                              73,773            79,351
                  
                                          $2,425,517        $2,018,059


4. LEASES

The Company leases various office facilites under non-cancelable operating 
leases which expire between the years 1998 and 2000.  The Company also leases 
office equipment under non-cancelable operating leases which expire over the 
next five years.  Rent expense incurred under these leases was $69,620, 
$57,768, and $57,647, for the years ended December 31, 1997, 1996 and 1995, 
respectively.

Future minimum lease payments for operating leases with initial terms in excess
of one year as of December 31, 1997 are as follows: 1998 - $99,108, 1999 -
$76,053, 2000 - $16,798, 2001 - $2,337, 2002 - $195.


5. STOCKHOLDERS' EQUITY AND WARRANTS

The Company issued 400,000 Class A, and 400,000 Class B warrants with an 
exercise price of $2.50 and $5.00, respectively in conjunction with its 
initial public offering.

During December 1994, 12,400 Class A warrants were exercised at $2.50 per share
and converted into 12,400 shares of common stock.  During the year ended 
December 31, 1995 an additional 10,200 Class A warrants were exercised at 
$2.50 per share and converted into 10,200 shares of common stock.

On December 7, 1995, the  Board of Directors voted to extend the exercise date
of both the Class A and Class B warrants until February 12, 1997.  At the same
time, the exercise price of the Class A warrants was reduced to $1.75 and the
exercise price of the Class B warrants was reduced to $2.50 per share of common
stock.

In April 1996, the Company refunded $16,950 of the proceeds received from the
exercise of these warrants due to the reduction in exercise price.


6. FREIGHT INCOME

Freight income includes rebate income, late charge income, and accounts
receivable credit balances in excess of twelve months.  These items totaled
$504,513, $197,757, and $423,269, for the years ended December 31, 1997, 1996,
and 1995, respectively.


7. INCOME TAXES

The provision for income taxes consisted of the following:

                                          December 31,
                              1997              1996              1995

Current:
   Federal                    $219,800          $153,300          $249,500
   State                        38,200            26,700            35,500

Deferred:
   Federal                    ( 49,600)
   State                      (  8,656)
  
                              $199,744          $180,000          $285,000


Reconciliation of the Company's provision for income taxes to the federal
statutory rate is as follows:

                        Year ended        Year Ended        Year ended
                        December 31,      December 31,      December 31,
                              1997              1996              1995

Statutory rate 
 applied to income
 before income 
 taxes                $225,900  34.0%   $153,300  34.0%   $249,500  34.0%
State income tax
 net of federal
 benefit                35,300   5.3%     16,200   3.6%     26,400   3.6%
Utilization of 
 net operating loss                                        ( 6,500)  (.7)%    
Recognition of 
 deferred tax asset    (58,256) (8.8)% 
Other                  ( 3,200)  0.5%     10,500   2.3%     15,600   2.0%

                      $199,744  31.0%   $180,000  39.9%   $285,000  38.9%

The components of deferred tax assets and liabilities were as follows:

                                                December 31
                                          1997              1996

Deferred tax asset:
 Accounts receivable reserve              $80,220           $52,214
Deferred tax liability:
 Depreciation                             (21,964)           (4,879)

                                           58,256            47,335
Valuation allowance                             -           (47,335)

Total deferred tax asset                  $58,256           $     -

SFAS No. 109 requires a valuation allowance to be recorded when it is more 
likely than not that some or all of the deferred tax asset will not be 
realized.  At December 31, 1996 a valuation allowance for the amount of the 
net deferred tax asset was recorded because of uncertainties as to the amount of
taxable income that would be generated in future years.  As a result of the 
Company's likelihood for future continuing profitability, management has 
determined that more likely than not, future taxable income will be 
sufficient to enable the Company to realize all of its deferred tax assets.  
Accordingly, current period tax expense has been reduced by the reduction of 
the prior years deferred tax asset, and no valuation allowance has been 
recorded at December 31, 1997.


8. RELATED PARTY TRANSACTIONS

The Company transacts business with various subsidiaries of its parent Company,
Vitran Corporation Inc.  Billings to these companies approximated $123,000,
$52,000, and $26,000, for the years ended December 31, 1997, 1996 and 1995,
respectively.  Billings from these companies approximated $75,000, $52,000, and
$70,000, for the years ended December 31, 1997, 1996 and 1995, respectively.  At
December 31, 1997 and 1996 accounts receivable from these companies approximated
$15,000 and $20,950, respectively, and accounts payable to these companies
approximated $9,200 and $870, respectively.   Included in billings from 
companies are rent charges for a facility leased from a related party.

9. ECONOMIC DEPENDENCY

During the years ended December 31, 1997, 1996 and 1995, sales to two major
customers exceeded 10% of the Company's total sales.  One of the customers, an
automobile manufacturer, accounted for 61%, 72% and 65% of total sales, and the
other, a distributor of wines and spirits, accounted for 4%, 11%, and 10% of the
total sales for the years ended December 31, 1997, 1996 and 1995, 
respectively.  In addition, the Company is dependent upon its continuing 
business relationship with its freight carriers, particularly the railroads.


10. CONCENTRATION OF CREDIT RISK

The Company's financial instruments subject to credit risk are primarily trade
accounts receivable.  The Company does not require collateral or other security
to support customer receivables.  The Company's clients generally pay in thirty
days or less; however, occasionally payments are not received until invoices age
to 60 days.  Other concentrations of credit risk with respect to trade
receivables are limited due to the dispersion of the majority of the Company's
customers across different industries throughout North America.  The rail
carriers generally draft the Company's bank accounts for payment.  The carrier
is responsible to the client for lost or damaged merchandise, therefore, the
Company does not assume liability for such loss, if any.  During the year, the
Company has maintained cash balances in excess of the Federally insured limits. 
The funds are with a major money center bank.  Consequently,  the Company does
not believe that there is a significant risk in having these balances in one
financial institution.


11. STOCK OPTIONS

During May 1996, the Company adopted a Stock Option Plan (the "Plan") whereby
employees of the Company may be granted incentive or non-qualified options to
purchase shares of the Company's common stock.  The Board of Directors has 
direct responsibility for the 
administration of the Plan.  The exercise price of 
the incentive options to employees must be equal to at least 100% of the fair 
market value of the common stock at the date of grant.  The exercise price of 
incentive options to officers, or affiliated persons, must be at least 110% 
of the fair market value as of the date of the grant.  At December 31, 1997, 
the Company has granted 261,000 stock options at an exercise price ranging 
from $.75 to $1.25; of this total, 187,000 incentive stock options were 
vested but not exercised.  The stock options vest at various rates over 
periods up to five years.


12. COMMITMENTS AND CONTINGENCIES

On August 18, 1997, the Company renewed a line of credit agreement with a
commercial bank for $2,000,000, which expires on September 1, 1998.  Interest is
at the lower of the London Interbank Offer Rate plus 250 basis points or the
bank's base rate.  Any outstanding principal balance plus unpaid interest is due
on demand.  The line is secured by the Company's accounts receivable and fixed
assets.  As of December 31, 1997, no amounts are outstanding on this credit 
line. 
            
                    
                           THE FREIGHT CONNECTION, INC.

SCHEDULE II - Amounts receivable from related parties and underwriters, 
promoters and employees other than related parties.

Years Ended December 31, 1997, 1996 and 1995
                                                                   Balance
                    Balance at                 Deductions          At End
                    Beginning               Amounts    Amounts     of Period 
Name of Debtor      of Year     Additions   Collected  Written off Noncurrent 

  
Year Ended
December 31, 1995

James Ingram        $45,936        ---          ---       ---      $45,936


Year Ended
December 31, 1996

James Ingram        $45,936        ---          ---       ---      $45,936


Year Ended
December 31, 1997

James Ingram        $45,936        ---          ---    $45,936     $     0   



Item 9.          Changes in and Disagreements with Accountants on Accounting 
         and Financial Disclosure 

         Effective August 1, 1997, Mark V. Wichrowski left Sweeney and Company,
P.A., where he was audit engagement partner for the Company, to join the
accounting firm of Margolies, Fink, and Wichrowski.  On December 1, 1997, the
Company dismissed the firm of Sweeney and Company, P.A. as its independent
accountant, replacing them with Margolies, Fink and Wichrowski, Certified Public
Accountants.

         The report of Sweeney and Company, P.A. on the financial statements 
of the Company for the past two fiscal years contained no adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty,
audit scope, or accounting principles.
         
         The Company's Board of Directors participated in and approved the 
decision to change independent accountants.

         In connection with the audits for the years ended December 31, 1996 and
1995, and through December 1, 1997, there have been no disagreements with the
former accountants on any matter of accounting principles or practices, 
financial statement disclosure, or auditing scope or procedure, which 
disagreement, if not resolved to the satisfaction of the former accountants, 
would have caused them to make references to the subject matter of the 
disagreement in their report on the financial statements for such year.

         During the year ended December 31, 1996, and through December 1, 1997,
there were no reportable events (as defined in Regulation S-K, Item 304 (a) (1)
(v)) with Sweeney and Company, P.A.

         Sweeney and Company's letter agreeing to the above statements is 
filed as an exhibit to this Report.


                                                   PART III


Item 10.         Directors and Executive Officers of the Registrant; 
         Compliance with Section 16 (a) of the Exchange Act.


         The Directors and Executive Officers of the Company are as
follows:

Name                                       Age             Position


Richard E. Gaetz                           40              Officer, Director

Geoff Duncan                               49               Officer

Albert Gnat                                59              Director

Richard D. McGraw                          54              Director

          

         Richard E. Gaetz has been the President of Freight Services Group of
Vitran since August 1989.  From October 1987 to August 1989, he was 
Vice-President, Clarke Transport Canada.  Effective October 11, 1996, Mr. 
Gaetz began serving as the Company's President and Chief Executive Officer.

         Geoff Duncan has been Executive Vice-President since November 1996. 
From May 1996 through November 1996, he was Vice President of Sales and
Marketing.  Prior to joining the Company, he was Vice-President of Sales and 
Marketing at APL.

         Albert Gnat has been Vice-Chairman of the Board and a director of
Vitran since 1983.  He is a partner in the law firm of Lang Michener, 
Toronto, Ontario, Canada.

         Richard D. McGraw has been the President, Chief Executive Officer 
and a director of Vitran since 1983.

         Messrs. Gaetz, Gnat and McGraw were elected directors of the Company on
December 1, 1993, pursuant to the July 1993 shareholders agreement between Mr.
Jackson and Vitran.  Vitran may be deemed a "parent" of the Company under
Securities Act Rule 405.  See Item 13 of this Report.

         Directors are elected to serve for one (1) year or until the next 
annual meeting of shareholders and until their successors have been elected 
and have qualified.  Executive officers are elected to serve at the 
discretion of the directors for one (1) year or until the first meeting of 
the Board of Directors following the next annual meeting of shareholders and 
until their successors have been elected and have qualified.

         No compensation is paid to any director, as such, for his or her 
services, but, by resolution of the Board of Directors, a fixed sum or
expense for actual attendance at each regular or special meeting by the Board 
may be authorized.

         
Compliance with Section 16(a) of the Exchange Act

         The Company does not have a class of equity security which is 
registered pursuant to Section 12 of the Securities Exchange Act of 1934.  
Accordingly, no compliance with Section 16(a) of the Exchange Act is required of
any officer, director, or principal shareholder.



Item 11.         Executive Compensation


         The following table sets forth, for the fiscal years ended December 31,
1995, 1996 and 1997, all compensation of the Company's Chief Executive Officer
and Chief Operating Officer.  No other executive officer or director of the
Company received total annual salary and bonus exceeding $100,000 in any of such
fiscal years.  The information provided should be read in conjunction with the
Company's Financial Statements and related notes thereto.  

                                  SUMMARY COMPENSATION TABLE

 Name and               Fiscal                              All Other
 Principal Position     Year        Salary      Bonus       Compensation       
      

 Michael Jackson,                    
 former President
 and Chief Executive    1996        $124,038(1)             $12,870(2)
 Officer                1995        $150,000                $15,270(2)
         
 Geoff Duncan, 
 Executive Vice
 President and
 Chief Operating        1997        $114,400    $11,000     $ 8,400(4)
 Officer                1996        $ 67,692(3)             $ 5,600(4)
_____________________

(1) Mr. Jackson was employed at an annual salary of $150,000 until
his termination on October 11, 1996.

(2) Automobile expense of $1200 monthly, and life insurance payment
of $870 annually.         

(3) Mr. Duncan began employment with the Company in May 1996 at an
annual salary of $110,000

(4) Automobile allowance of $700 per month.



                                           OPTION GRANTS
                                                                  
                          
         The purpose of the following table is to report grants of stock 
options to the named officers during the years ended December 31, 1995, 1996 
and 1997.
<TABLE>
                                                                  
                                                        Potential Realizable                
                                                        Value at Assumed
                                                        Annual Rates of Stock   
                                                        Price Appreciation for
Individual Grants                                       Option Term                                           
                          % of Total
                          Options                      
                          Granted
                Options   to        Exercise   Expiration                
Name            Granted   Employees Price      Date         5% ($)    10% ($)          
         
<S>               <C>     <C>       <C>        <C>         <C>       <C>         
Michael Jackson   50,000  19.16%    $ .75      8/22/99(1)  $ 2,004   $10,083          
Michael Jackson   30,000  11.49%    $1.25      8/22/99(1)  $   0(3) $    0(3)       
         
Geoff Duncan      50,000  19.16%    $1.25   4/29/02-06 (2) $   0(3) $18,617
Geoff Duncan      25,000   9.58%    $1.25  11/15/02-06 (2) $   0(3) $ 9,308

</TABLE>
---------------------------

(1) As part of the settlement agreement described in Item 3 of this Report, Mr.
Jackson's options did not expire upon his termination from the Company and will
remain exercisable until August 22, 1999. 

(2) Mr. Duncan's options vest over a 5 year period (20% per year) and expire 5 
years from the date that the options are vested.  At December 31, 1997, Mr. 
Duncan had 15,000 vested options.

(3) The potential realizable value, assuming annual stock appreciation rates of 
5% and 10%, is less than the price of the stock upon exercise of the options. 

----------------------------
           During May 1996, the Company adopted a Stock Option Plan (the "Plan")
whereby employees of the Company may be granted incentive or non-qualified 
options to purchase shares of the Company's common stock.  The Board of 
Directors has direct responsibility for the administration of the Plan.  The 
exercise price of the incentive options to employees must be equal to at least 
100% of the fair market value of the common stock at the date of grant.  The 
exercise price of incentive options 
to officers or affiliated persons must be at 
least 110% of the fair market value as of the date of the grant.  The fair 
market value of options granted was determined using the exercise price of 
the Vitran stock purchase warrant as well as other criteria that the Board 
deemed relevant.  This value may not relate to the trading value on the NASD 
Bulletin Board as there is not an active market for the Company's stock and 
trades are sporadic.  Upon termination of employment, all options held by the 
grantee shall immediately terminate.  The Board may waive any conditions or 
rights under, or amend, alter, suspend, discontinue, or terminate any Option 
theretofore granted and any Stock Option Agreements relating thereto; provided, 
however, that without the consent of an affected grantee, no such action may 
materially impair the rights of such grantee under such option.

Item 12.     Security Ownership of Certain Beneficial Owners and Management

       The following table sets forth information with respect to (i) any person
or "group" known to the Company to be the beneficial owner, as of March 18, 
1998, of more than five percent of the Common Stock and (ii) all Directors and 
Executive officers of the Company, individually and as a group.  Each 
beneficial owner has advised the Company that he, she or it has sole voting 
and investment power as to the shares of the Common Stock.

                                      Amount and           
                                      Nature of            Percentage of
                                      beneficial           Class
Name of beneficial owner              ownership            (1)

Michael J. Jackson                    643,400              13.33%
Clearwater, FL  34615

Vitran Corporation Inc.             3,918,030              81.19%   
70 University Avenue
Suite 350
Toronto, Canada  M5J2M4
                        
Richard E. Gaetz                       None                ----
70 University Avenue
Suite 350
Toronto, Canada  M5J2M4  (2)              

Geoff Duncan                           10,000                .21%
12900 Dupont Circle
Tampa, FL  33626  (2)

Albert Gnat                            None                ----
70 University Avenue
Suite 350
Toronto, Canada M5J2M4 (2)

Richard D. McGraw                      None                ----
70 University Avenue
Suite 350
Toronto, Canada M5J2M4 (2)

All Directors and Executive 
Officers as a Group 
(4 persons) (2)                        10,000                .21%
                  
---------------------
(1) The percentages in this column are computed on the basis of 4,825,630 
shares of Common Stock outstanding, as of the date of this Report.

(2) Three persons who are officers or directors of Vitran are directors of the 
Company.  See Item 10 of this Report.
---------------------
 

Item 13.        Certain Relationships and Related Transactions

       For information as to changes in control of the Company see Item 1 of 
this Report.

       Vitran is a North American multi-divisional operating company 
headquartered in Toronto, Ontario, Canada.  Vitran provides services to the 
freight and environmental industries and has over 1500 employees at seventy-five
locations across Canada and the United States.  Vitran's Freight Services 
Group, of which the Company is a part, provides a complete range of services 
for the movement of freight throughout the continent, utilizing both highway and
rail modes.  Services include less than truckload, full load, intermodal, 
dedicated contract carriage, warehousing and inventory management.  The members 
of the Vitran Freight Services Group are Transwestern Express, a less than 
truckload ("LTL") company concentrating on central and western markets of 
Canada, as well as the Northwest United States; G&W Freightways, which has 
six facilities in Quebec and Ontario, Canada, and specializes in next -day 
delivery in all of its service corridors; CAN-AM LTL, which offers cross-border 
LTL service between the United States and Canada and has facilities in Toronto 
and Chicago; CAN-AM Logistics, which provides logistic services to its 
customers; the Overland Group, which consists of various companies performing 
LTL, full load, short haul and customized truckload services; and the Company.

       Vitran solicits business between the United States and Canada as an 
agent for the Company through a Vitran sales office in Toronto.  Vitran and the 
Company have an agreement that all intermodal trans-border rail shipments 
shall be written by the Company, with Vitran's receiving an agency commission 
from the Company for such business.  Trans-border over-the-road shipments may be
made by the Company or other Vitran subsidiaries, including the Overland Group, 
depending on the type of service required by the shipper of such freight.  The 
Company does not believe that, given the different businesses of the Company and
the other Vitran subsidiaries, the Company will compete for any freight 
business with another Vitran subsidiary, nor does the Company anticipate that 
the Company and any other Vitran subsidiary will bid the same trans-border over-
the-road business.  However, in the event that any such unanticipated conflict 
does occur, the Company and Vitran intend to resolve any such conflict on a 
case-by-case basis, with resolution depending solely on which entity can best 
serve the needs of potential customers.  For information concerning the 
Company's relationship with Vitran and the other members of Vitran's Freight 
Services Group, see Item 1 of this Report.

       Concurrently with Vitran's acquisition of a majority of the Company's 
outstanding Common Stock on July 14, 1993, Vitran executed a shareholders' 
agreement with Michael Jackson, the Company's former President.  Pursuant to 
that agreement, Vitran and Mr. Jackson agreed that they would vote their shares 
to elect not less than five nor more than six directors, two of whom shall be 
nominees of Mr. Jackson and the balance of whom shall be nominees of Vitran.  
This agreement which deemed Vitran and Mr. Jackson as a group as defined in 
Rule 13d-5 of the Exchange Act, was terminated on July 7, 1997, as part of a 
settlement agreement between Mr. Jackson and Vitran.  See Item 3 of this Report.
 
       During July 1997, Vitran purchased 600,000 shares of stock as part of the
settlement described in Item 3 of this Report.  In addition, Vitran purchased 
100,000 shares from Mr. Jackson in September 1997.  This increased Vitran's 
ownership to 3,918,030 shares, or 81.19% of the Company's outstanding shares of 
common stock.

       For information with respect to the relationship between the Company's 
directors and Vitran, see Item 10 of this Report.

        
                                 PART IV

Item 14.        Exhibits, Financial Statement Schedules and Reports on Form 8-K


a) Exhibits and Financial Statement Schedules

Number               Description

2.1                  Agreement and Plan of Merger dated December 1, 1991 (2)

3.1                  Certificate of Incorporation (1)

3.2                  By-Laws (1)

3.2.1                Amended and Restated By-Laws (1)

3.3                  Articles of Merger - Florida (1)

3.4                  Certificate of Merger - Delaware (1)

4.1                  Specimen Certificate of Common Stock (1)

4.2                  Specimen Certificate of Class A Warrant (1)

4.2(a)               Specimen Certificate of Class B Warrant (1)

4.3                  Form of Four Year Common Stock Purchase Warrant (1)

4.4                  (Intentionally left blank)

4.5                  Form of Warrant Agency Agreement (1)

4.5(a)               Amendment dated June 1, 1994, to Warrant Agency Agreement 
                     (1)

4.5(b)               Amendment dated September 1, 1994, to Warrant Agency 
                     Agreement (1)

4.5(c)               Amendment dated December 7, 1995, to Warrant Agency 
                     Agreement (1)

4.6                  Warrant for the purchase of Common Stock issued to Vitran
                     Corporation Inc. and dated July 14, 1993 (3)

10.1                 Subscription Agreement between Vitran Corporation Inc. and 
                     The Freight Connection, Inc., dated July 14, 1993 (3)

10.2                 Employment Agreement between The Freight Connection, Inc., 
                     and Michael J. Jackson dated July 14, 1993 (1)

10.3                 Form of Lockup Agreement (1)

10.4                 Agreement with Robert and Patricia Johnston dated June 14, 
                     1993 (1)

10.5                 Shareholders' Agreement between Vitran Corporation Inc. and
                     Michael J. Jackson (1)

10.6                 Extended Lease Agreement dated February 4, 1997 (4)

10.7                 Loan Agreement between Republic Bank, St. Petersburg, 
                     Florida, and The Freight Connection, Inc., dated August 
                     19,  1995 (1)

10.8                 Renewed Loan Agreement between Republic Bank, St. 
                     Petersburg, Florida and The Freight Connection, Inc. dated 
                     August 18, 1997 (6)

10.9                 Sweeney and Company, P.A. 's letter to the Securities and 
                     Exchange Commission regarding change in certifying public 
                     accountant (5)

(1) Incorporated by reference to post-effective amendments to the Company's 
    Registration Statement on Form SB-2.

(2) Incorporated by reference to Report on Form 8-K filed January 27, 1992.

(3) Incorporated by reference to Report on Form 8-K filed July 21, 1993.

(4) Incorporated by reference to Report on Form 10-K filed March 26, 1997.

(5) Incorporated by reference to Report on Form 8-K filed December 1, 1997.

(6) Included herewith.


b) Reports on Form 8-K

During the year ended December 31, 1997, the Company filed a Form 8-K regarding 
Item #4 - Changes in Registrant's certifying accountant.  See Item 9 of this 
Report for further information. 


                              SIGNATURES

       Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this Annual Report and any 
subsequent amendments thereto to be signed on its behalf by the undersigned, 
thereunto duly authorized.


                                      THE FREIGHT CONNECTION, INC.
                                      a Delaware corporation

Dated: March 27, 1998                 By: /s/ Richard E. Gaetz
                                          President


       Pursuant to the requirements of the Securities Exchange Act of 1934, 
this Report has been signed below by the following persons in their respective 
capacities with the Registrant and on the dates indicated.


Signatures                          Title                   Date

/s/ Richard E. Gaetz                President and           March 27, 1998
                                    Director

/s/ Geoff Duncan                    Executive Vice          March 26, 1998
                                    President

/s/ Albert Gnat                     Director                March 27, 1998


/s/ Richard D. McGraw               Director                March 27, 1998