SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K


              ANNUAL REPORT PURSUANT TO SECTION 13 Or 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 1998    Commission file number 000-23095
                           -----------------                           ---------


                           Jevic Transportation, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                 New Jersey                               22-2373402
       -------------------------------                -------------------
       (State or other jurisdiction of                 (I.R.S. Employer
        incorporation or organization)                Identification No.)


                600 Creek Road, Delanco, NJ                 08075
          ---------------------------------------         ----------
          (Address of principal executive offices)        (Zip Code)


       Registrant's telephone number, including area code: (609) 461-7111

          Securities registered pursuant to Section 12(b) of the Act:

                                      None

          Securities registered pursuant to Section 12(g) of the Act:

                           Common Stock, no par value
                                (Title of Class)


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.  X Yes     No
                                   ---     ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of the 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. [X].

On March 10, 1999, the aggregate market value of the Registrant's Common Equity
(including Common Stock and Class A Common Stock), no par value, held by
nonaffiliates of the Registrant was approximately $29,857,182.

On March 10, 1999, 10,715,741 shares of the Registrant's Common Equity, no par
value, were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement to be filed with the Commission in
connection with the Annual Meeting of Shareholders scheduled to be held on
May 14, 1999 are incorporated by reference into Part III of this Form 10-K.


<PAGE>
                                     PART I

Item 1. Business

Overview

     Jevic is a motor carrier that combines the high revenue yield
characteristics of a typical LTL carrier with the operating flexibility and low
fixed costs of a truckload carrier. Jevic utilizes a simplified in-route
delivery system in which over 70% of the Company's shipments are delivered to
their destinations directly from line-haul trailers, eliminating the need for an
expensive network of labor-intensive breakbulk terminals, which most LTL
carriers use to distribute shipments. Jevic's revenue per terminal for 1998 was
approximately $33.2 million. The Company serves shippers throughout the eastern
half of the United States and in selected markets in the remainder of the
continental United States and Canada through its origination facilities located
in the metropolitan areas of Atlanta, Boston, Charlotte, Chicago, Houston and
Philadelphia. From 1996 to 1998, the Company's operating revenues and operating
income grew at compound annual rates of 20.9% and 33.3% respectively.

     Jevic's Breakbulk-Free system utilizes a simplified network of terminals,
which serve as regional origination points for initial consolidation of freight
on a trailer. The Company strategically combines smaller shipments (typically
handled by LTL carriers) with larger shipments (typically handled by truckload
carriers) in a sequence that permits direct unloading at each shipment's
destination, with no need to rehandle individual shipments at one or more
breakbulk terminals. Typical LTL carriers have to reload shipments into local
trucks for final delivery, whereas, in most cases, Jevic's operating system
avoids further rehandling at the destination facility. This generally results in
less damage to freight and faster transit times for less than full truckload
shipments. Jevic's flexible operating system minimizes rehandling of freight and
provides a broad range of transportation services.

Service

     Jevic seeks to customize its service offerings to meet its customers'
evolving requirements for greater speed and reliability. By regularly expanding
the services it provides, the Company increases the types of shipments it can
efficiently handle from existing customers and is able to attract and service
new customers.

     Fast Delivery Times. The Company provides next day and, in many cases, next
morning service along regional lanes of up to 500 miles. As an example, Jevic
offers freight delivery from metropolitan Philadelphia to metropolitan Boston by
noon on the next business day. In addition, Jevic offers delivery from
metropolitan Atlanta to New England by the morning of the second day after
pickup and from the Northeast to metropolitan Chicago in two days.

     Wide Range of Shipment Sizes. Jevic provides its customers with the
flexibility to handle shipments of a range of sizes and weights not typically
provided by standard LTL or truckload carriers, which enhances the Company's
ability to become a core carrier to its customers. Many of the Company's
customers require transportation of multiple shipments ranging from as little as
50 pounds to over 40,000 pounds. While a truckload carrier would charge a
customer the full truckload rate for each shipment weighing over 10,000 pounds
even if it does not fill a trailer, the Company can efficiently handle the
customer's partial truckload shipments, charging the customer less than a full
truckload rate, and then integrating smaller shipments from the same customer or
other customers in the same region to fill the rest of the trailer. This allows
the customer to save money on the truckload portion of the

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shipment and the Company to increase freight density and shipments per pickup,
thereby minimizing incremental costs and improving operating efficiencies.

     Specialized Services - Heated and Expedited Service Options. The Company
offers a heated service for customers whose freight must be protected from
freezing during the winter months, principally customers in the chemical
industry. Jevic's heated trailers allow the Company to provide significant
flexibility to customers, such as pickups and deliveries of heated service
shipments on any day of the week. The Company's heated service enables the
Company to attract business from new customers and then expand the services it
provides for those customers to encompass their regular shipments as well as
their heated service shipments. In addition, by providing this heated service,
Jevic is able to enhance revenues from mid-October to mid-April, a period in
which freight volumes are typically lower than at other times during the year.
Jevic believes that there is no significant competition for its heated service
in the LTL market and that it purchases more integrated diesel trailer heaters
than any LTL carrier. In addition, Jevic offers expedited delivery service at
competitive prices on a regional and inter-regional basis by integrating these
premium rated deliveries with standard service deliveries, thereby increasing
revenue per mile.

Breakbulk-Free Operating Model

     Jevic utilizes a simplified network of terminals, which serve as regional
origination points for initial consolidation of freight on a trailer. Shipments
of various sizes are typically picked up "same day" from customers and the
Company combines smaller shipments (typically handled by LTL carriers) with
larger shipments (typically handled by truckload carriers) onto a line-haul
trailer in a sequence that permits the direct unloading of each shipment at its
final destination. This simplifies the delivery process by reducing the number
of facilities needed to effect delivery. The Company's in-route delivery system
bypasses intermediate breakbulk terminals and, in most cases, destination
terminals.

     LTL carriers typically rehandle freight at one or more breakbulk terminals
and reload the freight at a destination terminal into a local truck for delivery
to the final destination. Breakbulk-Free operations, in contrast, do not require
an extensive network of "hub and spoke" operating terminals. As a result, Jevic
avoids the fixed costs of operating and maintaining a large network of breakbulk
terminals and a large staff of freight handlers.

     Jevic's Breakbulk-Free system accommodates a wider range of shipment sizes,
as determined by weight, than most LTL carriers, and can provide more rapid
transit times in many cases. By minimizing rehandling, Jevic's system reduces
damage to shipments and associated costs. The Breakbulk-Free system also
enhances the Company's asset utilization. To further increase asset utilization
and shorten transit times, Jevic has integrated the use of twin 28-foot
trailers, or pups, into its existing fleet of 48-foot and 53-foot trailers. The
pups are separated without rehandling of freight, and deliveries are made from
the two pups to different destinations at the same time. Deliveries via pup
trailers can effectively double the number of deliveries per day compared to a
single 48- or 53-foot trailer.

Market and Customers

     Jevic's sales force utilizes a consultative approach to develop customized
logistics-based solutions to meet its customers' total transportation and
distribution needs. These solutions are designed to reduce the customer's total
transportation costs, inventory carrying costs, handling costs, loss and damage
claims and information processing costs. The Company's customer-focused
approach, in which Jevic provides information and problem solving as well as
transportation, helps expand the Company's customer base and forge long-terms
relationships with customers.

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     The Company targets prospective customers whose logistics needs are not
being met and develops solutions for those needs. Once a customer begins to use
Jevic for certain of its shipping needs, the Company offers the customer
additional transportation services to develop the account while increasing its
pickup, lane and delivery density.

     Jevic develops new geographic markets in existing or new lanes and regions
and monitors existing lanes for lane balance in both directions. The Company
addresses unbalanced lanes by creating new sales territories in the specific
areas that require additional freight as an origination point. Sales territories
are designed to minimize the distance between pickups and increase fleet
utilization, and seasoned sales personnel are recruited and hired for each
territory. Potential customers within the new territory are researched and
qualified through telephone interviews and a final list of top potential
accounts is selected as a starting point for the sales process.

     At December 31, 1998, the Company had a direct sales staff of 102
employees. The sales force is comprised of experienced motor carrier
representatives who have been recruited for territories geographically located
to maximize both pickup and lane density. The Company's sales personnel have
knowledge of the local market in which they operate and receive specialized
training in order to learn the Jevic system, including the disciplined sales
criteria used in the customer selection process. Many sales personnel work from
their homes, which are typically located in the region of an existing or planned
Company facility. The sales force is divided among three regions covering the
Northeast, South/Southeast and Midwest. The Company's National Accounts
Department coordinates the marketing efforts for customers with multiple
shipping locations across the country.

     At December 31, 1998, the Company's customer based included over 8,000
active accounts. The Company transports general commodities, including chemical
commodities used in manufacturing, petroleum, non-durable and durable goods,
paper products, rubber, plastics, pharmaceuticals and cosmetics.

     In 1998, Jevic's largest 20, 10 and five customers accounted for
approximately 22.3%, 17.2% and 12.1% of the Company's operating revenues,
respectively. During the same year, the Company's largest customer accounted for
approximately 4.0% of operating revenues. Because approximately 49% of the
Company's revenues from its top 200 customers in 1998 had standard industrial
classification codes in the chemicals industry, the Company believes that a
significant amount of its business is generated from transporting chemicals,
including various materials which are subject to environmental and safety
regulations.

Regional Facility Operations

     Jevic currently operates through eight regional facilities. The Company's
principal regional facility and headquarters are located in metropolitan
Philadelphia, and its other facilities are located in metropolitan Atlanta,
Boston, Charlotte, Chicago, Cincinnati, Cleveland and Houston. Jevic's regional
facilities are strategically located to permit the Company to provide high
quality service and minimize freight rehandling to reduce costs. The Company
uses its regional facilities as origination points for initial consolidation of
freight onto the trailer for delivery in-route to the customer. Jevic does not
use regional facilities as breakbulk terminals. Over 70% of the Company's LTL
tonnage is routed directly from the originating terminal to the customer's
destination. The remaining freight is unloaded at a Company terminal for final
local delivery to the destination, typically in a situation where a specific
piece of equipment, such as a liftgate, is required in the unloading process but
is not available on the trailer or where the customer requires a specific
delivery time.
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     Each regional facility is responsible for the pickup and delivery of
freight for its own service area. Primary responsibility for customer service
resides at the facility level. Facility employees trace freight movement between
facilities on the Company's automated tracing system and respond to customer
requests for delivery information. Jevic believes that its policy of maintaining
primary accountability to customers at the facility level fosters better
relationships, results in improved customer service and enhances its ability to
meet customers' needs.

     Jevic's centralized Line-Haul Department is responsible for directing the
system wide movement of revenue equipment from its origin to destination. The
Company continuously monitors the usage and location of its revenue equipment
and seeks to maximize utilization of all revenue equipment. Dispatchers are
responsible for tracking all drivers and revenue equipment until trailers are
emptied in order to assure timely delivery of shipments. Dispatchers then direct
the reloading of the trailers for deliveries either in the same region or to
another region serviced by the Company.

     On a daily basis, the Company's senior executives and facility management
personnel review the prior day's freight shipment and activity reports to
monitor the Company's performance. The daily freight shipment report identifies
shippers, destinations, shipment size and shipment routing. The daily activity
report includes data such as regional bill counts, driver and tractor
availability, load counts, freight damage and loss and accidents. The Company
uses scheduled runs, and schedules additional runs as necessary, to meet its
delivery time schedules.

     The Company's growth plans include adding selected regional facilities in
new regions when supported by customer demand.

Technology

     The Company believes that its use of proven technologies enhances the
Company's efficiency and provides competitive service advantages. Through this
technology, the Company provides better and more timely information to its
customers, improves its operating efficiency and controls and more effectively
leverages its resources.

     Satellite Communications. The Company has installed the QUALCOMM OmniTRACS
Satellite-based communications system ("OmniTRACS System") throughout its fleet.
Although more common to the truckload segment, most LTL carriers do not use
satellite-based communications systems. Operating continuously, the OmniTRACS
System assists the Company's dispatchers in load planning and enables them to
monitor the movement of freight and simplifies the location of equipment. The
OmniTRACS System also permits timely and efficient communication of critical
operating data, such as shipment orders, loading instructions, routing, safety,
maintenance, billing, tracing and delivery information. For example, dispatchers
assign loads by entering the required information into the system. Drivers then
access the previously-planned pickup from the system and acquire all the
necessary customer, order and routing information through their on-board
OmniTRACS display unit, thus eliminating waiting time and inefficient dependence
on truckstop and roadside telephones. Before installation of the OmniTRACS
system, Jevic typically lost one hour or more of productive time per driver per
day while the driver stopped to wait for and use a telephone.

     Enterprise Wide Computing. The Company's NCR 3555 UNIX platform works in
conjunction with a Novell/NT network consisting of over a dozen file servers,
provides connectivity with all Company facilities and produces operational
reports for all end users at the Company's headquarters. In 1998, the Company
added a Sequent NUMA-Q 2000 computer architecture in order to provide increased

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enterprise computing and additional disaster recovery capabilities. Relational
database technology (RDBMS) is being employed to provide flexibility and
consistency of data. The Company is developing enhancements to its core
transportation application with custom-designed software.

         Document Imaging. The Company uses an optical imaging system to scan
     documents such as bills of lading and delivery receipts onto compact disks.
Images are available across all networks to reduce clerical and management time
required to enter and retrieve information. This process enhances the
availability and increases the utilization of data, especially that which
pertains directly to customer service. The Company is currently adding
additional storage and system functionality that will increase image retention,
eliminate many manual duties and be expandable to meet future requirements.

     Bar Coding. In 1999, the Company plans to install a comprehensive freight
locator and cross docking system. The bar coding system is designed to enhance
the Company's freight tracking capability and reduce cargo claims and also to
improve operational efficiency through the placement of a bar code on every
shipment which is readable by drivers and facility personnel using a handheld
wireless scanner.

Drivers

     A key element contributing to the Company's growth has been its driver
force. As a former driver, Harry Muhlschlegel, the Company's co-founder and
Chief Executive Officer, has continually emphasized the importance of a stable,
high quality driver force. The Company has implemented policies and programs to
maintain a high level of driver quality and job satisfaction. In 1998, the
average annual total wages paid to drivers who worked full time during the year
was over $56,000, not including health insurance and other related benefits
provided by the Company. Jevic's line-haul drivers are typically able to return
home once a week and are provided with late model tractors with modern features
to provide driver comfort. Although the industry experiences driver shortages
from time to time, Jevic has been successful in maintaining an adequate number
of qualified drivers. The Company's annual driver turnover rate was 22.8% in
1998. Among drivers who have worked for the Company for more than one year, the
turnover rate for 1998 was 5.4%. As of December 31, 1998, 71% of the Company's
drivers had worked for the Company for more than one year, and 52% of them had
worked for the Company for more than two years.

     At December 31, 1998, Jevic employed 1,174 Company drivers. In addition,
119 owner-operator drivers provided services to the Company. The Company
believes that its proven ability to recruit and retain dedicated, skilled
drivers is a key factor in the Company's continued growth and success. The
Company's recruiting and selection methods are designed to attract the best
drivers, which contributes to customer satisfaction and reduced claims and
insurance expense as a percentage of revenues. Using these methods, the Company
has been able to more effectively recruit, hire and retain a reliable, stable
driver workforce.

     Jevic's policy is to recruit drivers who reside along the Company's primary
lanes of traffic, which enables them to return home more often and reduces the
number of off-route miles. The Company hires drivers based upon driving records
and experience, and requires all drivers to be no less than 25 years of age with
at least three years of experience. New hires are required to undergo a two-week
orientation program designed to introduce them to Jevic's operating strategy.
The Company meets with new drivers within the first 90 days of employment and
periodically thereafter to carefully evaluate performance, assist with
compatibility with Jevic's operating structure and discuss any current concerns.

     The Company believes that its stringent selection criteria for drivers, and
its initial and regular refresher training courses for drivers, have been
important factors in improving the company's safety

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record. Drivers are eligible for bonuses ranging from $500 to $2,500 annually
for safe and courteous driving, depending on seniority within the Company.

Owner-Operators

     In 1996, the Company initiated an owner-operator program. At December 31,
1998, the Company had contracts with 119 owner-operators that require the
contractor to furnish a tractor and a driver exclusively to transport, load and
unload goods carried by the Company. Owner-operators are subject to the same
recruitment criteria as employee drivers and undergo the same orientation and
training programs. The owner-operators are compensated at a contracted rate per
mile and per pickup and delivery made in-route. The owner-operator program
provides the Company with an alternative method of obtaining additional revenue
equipment with no capital investment, improving return on assets. It also
provides access to an additional pool of drivers in response to the intense
industry competition for qualified drivers and, to a lesser degree, serves to
reduce the Company's direct exposure to fuel price fluctuations.

Revenue Equipment and Maintenance

     At December 31, 1998, the Company operated 1,093 tractors, including 796
road and regional tractors and 297 local tractors. The Company's policy is to
use new road tractors for up to 500,000 miles, after which they are generally
traded in or sold. Based on current tractor mileage levels, this translates to
approximately three years for tractors used in interregional operations and
approximately five years for tractors used in regional or local operations. The
major operating systems of the Company's tractors are covered by manufacturers'
warranties for between 250,000 to 750,000 miles. Most of the Company's tractors
are covered by agreements under which the Company has the right to resell the
tractors to the vendor at a defined price. All owner-operators' tractors are
required to pass DOT inspection before use in the Company's fleet.

     At December 31, 1998, the Company operated a fleet of 2,016 trailers,
including 479 53-foot trailers, 1,385 48-foot trailers, and 152 28-foot "pup"
trailers. Trailers are generally traded after 10 years. At December 31, 1998,
44.8% of the Company's trailers were equipped with integrated heated capability.

     The Company has rigid specifications for all tractor and engine components
and has selected, among others, Freightliner tractors and Cummins engines as its
standard equipment. The Cummins electronic diesel engines control speed and
decrease fuel consumption. All tractors have modern features designed to enhance
performance and provide driver comfort.

     In order to enhance its Breakbulk-Free operating model, Jevic uses twin
28-foot trailers, or pups. The Company derives several advantages through the
selective use of pup trailers. The use of twin pups permits more freight to be
hauled with one tractor than could be hauled if one larger trailer were used.
The pups are separated without rehandling of freight, and deliveries are made
from two pups to different destinations at the same time, providing a
significant improvement in delivery times. Deliveries via pup trailers can
effectively double the number of deliveries per day compared to a single 48-foot
or 53-foot trailer. Jevic also uses pups to effect deliveries in regions where
the delivery density is high enough to require it, but where pickup density has
not developed to the point of opening a new regional facility to originate
shipments out of the region.

     The Company believes that its heated service is better than that offered by
other motor carriers in several respects. The Company's trailers have a
permanently installed heating system integrated in an

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insulated trailer body. In addition, the Company's trailers are designed so that
the air is heated and circulated inside the trailer by passing over a heat
exchanger, with no exposure to any sparks or flame. This provides increased
safety for both the driver and the cargo. In contrast, other companies which
offer protective service alternatively may preheat the cargo and/or cover it
with a blanket or place a portable heater in the trailer, which heats the cargo
unevenly and ineffectively and does not provide the same safety features of the
Company's heated trailers. In addition, competing carriers generally provide
much more restrictive protective services, refusing to transport shipments
requiring protection from freezing in extremely cold weather or over a weekend.

     The Company's primary maintenance facility is located near its New Jersey
headquarters and main regional facility. In addition, routine and preventative
maintenance checks and repairs on all revenue equipment are performed at all of
the Company's regional facilities. Through regular maintenance of its revenue
equipment, Jevic minimizes equipment downtime and enhances the equipment's
operating performance.

Safety and Risk Management

     The Company is committed to a high degree of safety in all of its
operations, and utilizes a self-directed, team approach to risk management,
building in loss control at the earliest stages. Employees are provided with the
equipment and training required to do their jobs safely and efficiently. Drivers
are retrained for risk management on a periodic basis and are provided with
cameras to film accident scenes as soon as an incident occurs.

     In 1998, insurance and claims as a percentage of operating revenues was
1.8%, which the Company believes is low in comparison to the trucking industry
as a whole. This performance is the result of careful driver recruiting,
extensive driver training and the emphasis on a safety-conscious culture
throughout the Company.

     The Company is self-insured for cargo claims up to $5,000 per occurrence.
The Company self-insures for bodily injury claims for up to $20,000 per
occurrence. Since 1993 the Company has self-insured for workers' compensation
claims of up to $250,000 per occurrence in order to capitalize on its favorable
claims history. During the past four years the Company received only 15 claims
exceeding $50,000, of which only two exceeded $100,000. This led to an increase
in the Company's discount from standard insurance premium rates from 38% in 1992
to 79% in 1998.

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Employees

     At December 31, 1998, the Company had 2,326 employees in the following
categories:

               Category                                        No. of Employees
               --------                                        ----------------
     Drivers..................................................       1,174
     Executives and Administrative............................         698
     Dockworkers..............................................         269
     Mechanics................................................          83
     Sales and Marketing......................................         102

     None of Jevic's employees are represented by a collective bargaining
unit. At December 31, 1998, the Company had 119 owner-operator drivers under
contract in addition to its employee drivers, and employed 102 part-time
employees. Management believes that relations with its employees and
owner-operators are good.

     The Company's executive officers provide strategic direction and emphasize
and monitor continuous operating improvement, allowing operating management to
concentrate on producing and delivering competitive products and to respond
quickly to market conditions.

Fuel Availability and Cost

     The motor carrier transportation industry is dependent upon the
availability of diesel fuel. Increases in fuel prices or fuel taxes, shortages
of fuel or rationing of petroleum products could have a material, adverse effect
on the operations and profitability of the Company. As a result of its
relationships with major fuel suppliers, the Company has not experienced
difficulties in maintaining a consistent and ample supply of fuel, but fuel is
one of the Company's most substantial operating expenses. In order to reduce the
Company's vulnerability to rapid increases in the price of fuel, the Company
enters into purchase contracts with fuel suppliers from time to time for a
portion of its estimated fuel requirements at guaranteed prices. The Company is
a party to agreements with three fuel suppliers to purchase approximately 35% of
its estimated fuel needs through April 2000 at fixed prices. Although these
arrangements help reduce the Company's vulnerability to rapid increases in the
price of fuel, the Company will not benefit from a decrease in the price of fuel
to the extent of its commitment to purchase fuel under these contracts.

Competition

     The trucking portion of the transportation industry is highly competitive
and fragmented. Jevic competes with regional, inter-regional and national LTL
carriers of varying sizes and, to a lesser extent, with truckload carriers, air
freight carriers and railroads, a number of which have greater financial
resources, operate more revenue equipment and have larger freight capacity than
the Company. Also, in certain regions, the Company faces competition from local
carriers. The Company's principal competitors are Roadway Express, Inc., Yellow
Corp., Consolidated Freightways Corp., Con-Way Transportation Services, Arkansas
Best Corp. and U.S. Freightways.

     The Company believes that the principal competitive factors in its business
are service, pricing and the availability and configuration of equipment that
meets a variety of customers' needs. The Company also competes with other motor
carriers for the services of drivers. The Company believes that

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it is able to compete effectively in its markets by providing consistently high
quality and timely-service at competitive prices.

     The Company believes that there are substantial barriers to entry, which
restrict the ability of competitors to adopt a Breakbulk-Free operating model.
Small LTL carriers typically lack the necessary critical mass, freight density
and capital, while large LTL carriers typically have work rules and labor
practices that lack the flexibility which a Breakbulk-Free system requires.
Truckload carriers lack a system to accommodate both multiple pick-ups and
multiple deliveries and would require a substantial capital investment to build
the necessary terminals. Additionally, the Breakbulk-Free operating model
requires high quality drivers and sophisticated operating systems and
management, which the Company has developed internally over an extended period
of years.

Regulation

     Interstate and intrastate motor carriage has been substantially deregulated
as a result of the enactment of the Motor Carrier Act of 1980, the Trucking
Industry Regulatory Reform Act of 1994, the Federal Aviation Administration
Authorization Act of 1994 and the ICC Termination Act of 1995. Carriers can now
readily enter the trucking industry and rates and services are largely free of
regulatory controls. However, interstate motor carriers remain subject to
certain regulatory controls imposed by agencies within the United States
Department of Transportation ("DOT"), such as the Federal Highway Administration
and the Surface Transportation Board.

     Interstate motor carrier operations are subject to safety requirements
prescribed by the DOT. Such matters as weight and dimension of equipment are
also subject to federal and state regulations. Since 1989, DOT regulations have
imposed mandatory drug testing of drivers, and more recent DOT Regulations have
imposed certain tests for alcohol levels in drivers and other safety personnel.
To date, the DOT's national commercial driver's license and drug testing and
alcohol testing requirements have not adversely affected the availability to the
Company of qualified drivers.

     The Federal Aviation Administration Authorization Act of 1994, which became
effective on January 1, 1995, essentially deregulated intrastate transportation
by motor carriers. This Act prohibits individual states from regulating entry,
pricing or service levels. However, the states retained the right to continue to
require certification of carriers, but this certification is based only upon two
primary fitness criteria: safety and insurance.

     The Company's operations are subject to various environmental laws and
regulations dealing with, among other things, the transportation, storage,
presence, use, disposal and handling of hazardous materials, discharge of
stormwater and underground fuel storage tanks. All of the Company's drivers are
trained in the handling and transportation of hazardous substances and are
required to have a hazardous materials endorsement on their drivers license. The
Company believes it is in compliance with applicable Environmental laws and
regulations.

     The transportation industry is subject to regulatory and legislative
changes that can affect the economics of the industry by requiring changes in
operating practices or influencing the demand for the costs of providing
services to shippers. From time to time, various legislative proposals are
introduced to increase federal, state, or local taxes, including taxes on motor
fuels. The Company cannot predict whether, or in what form, any increase in such
taxes applicable to the Company will be enacted.

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The executive officers of the Company are:

        Name                Age       Position
        ----                ---       --------
Harry J. Muhlschlegel       52        Chairman of the Board and Chief Executive
                                      Officer

Karen B. Muhlschlegel       52        Vice President, Secretary and Director

Paul J. Karvois             44        President, Chief Operating Officer and
                                      Director

Brian J. Fitzpatrick        39        Senior Vice President and Chief Financial
                                      Officer

Joseph A. Librizzi          50        Senior Vice President - Marketing and
                                      Sales

Raymond M. Conlin           36        Senior Vice President - Administration

     Harry J. Muhlschlegel has over 28 years of experience in the trucking
industry. He co-founded Jevic along with his wife, Karen Muhlschlegel, in 1981
and has served as its Chairman of the Board and Chief Executive Officer since
its inception. Until March 1997, he also served as the Company's President.

     Karen B. Muhlschlegel has over 28 years of experience in the trucking
industry. She co-founded Jevic along with her husband, Harry Muhlschlegel, in
1981 and has served as a Vice President, Secretary and a director of the Company
since its inception.

     Paul J. Karvois became Jevic's President and Chief Operating Officer in
March 1997 and he was elected as a director in August 1997. He joined the
Company in January 1992 as Director of Insurance. Later in 1992, he created the
Company's risk management group and became Director of Risk Management. Mr.
Karvois was promoted to the position of Senior Vice President - Marketing and
Sales in December 1993. Prior to joining the Company, Mr. Karvois had 21 years
of marketing, sales and operations experience in the trucking industry, serving
in a variety of positions with truckload and LTL carriers.

     Brian J. Fitzpatrick joined Jevic in September 1993 as Senior Vice
President - Finance in order to create the Company's financial and
administrative division. He was elected to the office of Chief Financial Officer
in February 1995, in which capacity he is additionally responsible for
developing overall financial strategies and technology systems for the Company.
Prior to joining the Company, Mr. Fitzpatrick had 12 years of commercial banking
experience.

     Joseph A. Librizzi joined Jevic in April 1997 as Senior Vice President -
Marketing and Sales. Prior to joining the Company, Mr. Librizzi had more than 26
years of experience in Operations and Sales, holding executive positions in the
LTL industry for both regional and national companies.

     Raymond M. Conlin was elected to the office of Senior Vice President -
Administration in October 1998. He joined the Company in June 1993 as Director
of Insurance and later in that year

                                       11

<PAGE>

assumed the role of Director of Risk Management. Mr. Conlin was promoted to the
position of Vice President - Administration in June 1995. Prior to joining the
Company, Mr. Conlin had eight years of financial, sales and operations
experience in the transportation industry.

Item 2. Properties

     The Company owns its headquarters and main regional facility located in
Delanco, New Jersey, near Philadelphia. The Company also owns its Houston,
Chicago, Charlotte and New England regional facilities and leases regional
facilities in Atlanta, Cleveland and Cincinnati. In 1998, the Company completed
the construction of new facilities in metropolitan Boston and Chicago which
replaced its leased facilities.

Owned Facilities

<TABLE>
<CAPTION>

                                                              Square Footage
                                                 ------------------------------------------
                                                                    Terminal
                                                           # of       and
                Location                         Acres     Doors     Office     Maintenance
                --------                         -----     -----    --------    -----------
<S>                                               <C>       <C>      <C>           <C>
600 Creek Road, Delanco, NJ (Phila. Metro)......  36.0      108      155,900       17,400
700 Creek Road, Delanco, NJ (Phila. Metro)(1)...  19.5       --       36,000           --
Charlotte.......................................  11.7       47       34,750        6,400
Chicago.........................................  41.0      100      142,065       16,250
Houston.........................................   6.5       44       15,870        3,920
New England.....................................  21.0       80       88,000        3,125
</TABLE>

Leased Facilities

<TABLE>
<CAPTION>
                                               Square Footage
                         ------------------------------------------------------------
                                           Terminal
                                  # of        and                          Lease
    Location             Acres    Doors     Office     Maintenance       Expiration
    --------             -----    -----    --------    -----------       ----------
<S>                      <C>        <C>     <C>            <C>               <C> 
Atlanta...............   18.0       74      34,400         7,056       April 2000
Cincinnati............   16.0       72      48,200           n/a       September 2003
Cleveland.............    8.0       48      17,976         1,632       September 2003
Willingboro, NJ.......    5.5       --          --        24,000       December 2013
</TABLE>

----------
(1)  This facility is an office only.

Item 3. Legal Proceedings

     The Company is routinely a party to litigation incidental to its business,
primarily involving claims for workers' compensation or for personal injury and
property damage incurred in the transportation of freight. Management believes
that the outcome of such actions will not have a material adverse effect on the
Company's financial position or results of operations. The Company maintains
insurance which covers liability amounts in excess of deductibles.

                                       12

<PAGE>

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

     None.


                                     PART II

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

     The Company completed its initial public offering of common stock on
October 7, 1997, and its common stock is traded on the Nasdaq National Market
under the symbol "JEVC".

     The following table sets forth, for the fiscal quarters indicated, the high
and low sales prices per share for the Company's common stock, as reported on
the Nasdaq National Market:

        Period                                             High           Low
        ------                                            ------         ------
     1998
     ----
     First Quarter                                        $17.25         $13.88
     Second Quarter                                        16.00          10.50
     Third Quarter                                         12.00           5.50
     Fourth Quarter                                         9.13           5.50

     1997                                                  High           Low
     ----                                                 ------         ------
     Fourth Quarter (commencing October 7, 1997) (1)      $18.88         $15.38
--------
(1)  The date the Company's Common Stock commenced trading.

     As of March 9, 1999, there were 79 holders of record of the Company's
common stock and an estimated number of beneficial owners of the common stock of
approximately 1,600.

     The Company has not declared or paid any cash dividends or distributions on
its capital stock. The Company currently intends to retain any future earnings
to fund operations and the continued development of its business and, therefore,
does not anticipate paying any cash dividends on its Common Equity in the
foreseeable future. Payment of dividends on the Common Equity is restricted
under the Company's bank credit facility. Future cash dividends, if any, will be
determined by the Board of Directors, and will be based upon the Company's
earnings, capital requirements, financial condition and other factors deemed
relevant by the Board of Directors.

                                       13

<PAGE>

Item 6. Selected Financial Data

     The following selected financial and operating data should be read in
conjunction with the Company's Consolidated Financial Statements and notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," appearing elsewhere herein. Please refer to Note 2 and
Note 7 of "Notes to Consolidated Financial Statements" concerning 1997 income
taxes and pro forma data.

<TABLE>
<CAPTION>

                                                              Year Ended December 31,
                                          ---------------------------------------------------------------------
                                             1998           1997           1996           1995           1994
                                          ---------      ---------      ---------      ---------      ---------
                                                 (In thousands, except per share and certain operating data)
<S>                                       <C>            <C>            <C>            <C>            <C>
INCOME STATEMENT DATA:
Operating revenues ..................     $ 226,123      $ 190,821      $ 154,799      $ 125,973      $ 119,299
                                          ---------      ---------      ---------      ---------      ---------
Operating expenses:
     Salaries, wages and benefits ...       114,181         95,739         81,215         67,541         58,276
     Supplies and other expenses ....        39,427         35,983         32,824         30,290         30,553
     Purchased transportation .......        27,109         18,913         10,761          5,608          4,019
     Depreciation and amortization ..        14,801         11,465          8,732          6,445          4,395
     Operating taxes and licenses ...        10,393          9,066          8,722          7,767          7,369
     Insurance and claims ...........         3,970          4,071          3,325          2,612          3,141
     (Gain) loss on sale of equipment          (444)           145           (170)          (340)          (191)
                                          ---------      ---------      ---------      ---------      ---------
                                            209,437        175,382        145,409        119,923        107,562
                                          ---------      ---------      ---------      ---------      ---------
            Operating income ........        16,686         15,439          9,390          6,050         11,737
Interest expense, net ...............         1,431          2,836          2,966          1,773          1,080
Other income, net ...................          (192)          (401)          (200)          (153)          (106)
                                          ---------      ---------      ---------      ---------      ---------
Income before income taxes ..........        15,447         13,004          6,624          4,430         10,763
Income taxes ........................         6,126         10,586            429            191            351
                                          ---------      ---------      ---------      ---------      ---------
Net income ..........................     $   9,321      $   2,418      $   6,195      $   4,239      $  10,412
                                          =========      =========      =========      =========      =========
    Basic net income per share ......     $    0.87      $    0.31      $    0.90      $    0.62      $    1.52
                                          =========      =========      =========      =========      =========
    Diluted net income per share ....     $    0.86      $    0.30      $    0.88      $    0.62      $    1.52
                                          =========      =========      =========      =========      =========
Pro forma data:
    Income before income taxes.......                    $  13,004
    Income taxes.....................                        5,202
                                                         ---------
    Net income.......................                    $   7,802
                                                         =========
       Basic net income per share....                    $    0.94
                                                         =========
       Diluted net income per share..                    $    0.92
                                                         =========
</TABLE>

                                       14
<PAGE>



<TABLE>
<CAPTION>

                                                              Year Ended December 31,
                                          ---------------------------------------------------------------------
                                             1998           1997           1996           1995           1994
                                          ---------      ---------      ---------      ---------      ---------
<S>                                       <C>            <C>            <C>            <C>            <C>
OPERATING DATA:
Total shipments (000s)...............           784            685            586            453            370
Total miles (000s)...................       104,371         91,527         75,795         65,599         65,855
Average operating revenue:
     Per mile........................     $    2.17      $    2.08      $    2.04      $    1.92      $    1.81
     Per tractor per week............     $   3,859      $   3,807      $   3,764      $   3,539      $   3,553
Number of tractors at end of year:
     Company.........................         1,093            937            776            740            685
     Owner-operator..................           119            123             63             --             --
</TABLE>


<TABLE>
<CAPTION>

                                                                        December 31,
                                          ---------------------------------------------------------------------
                                             1998           1997           1996           1995           1994
                                          ---------      ---------      ---------      ---------      ---------
                                                                      (In thousands)
<S>                                       <C>            <C>            <C>            <C>            <C>
BALANCE SHEET DATA:
Working capital (deficit)............     $   6,490      $  13,852      $  (5,917)     $  (2,727)     $   1,336
Property and equipment, net..........       114,006         77,894         58,967         46,958         31,204
Total assets.........................       147,839        113,368         82,355         66,427         49,037
Long-term debt, less current
   maturities........................        31,008         15,679         28,855         25,734         14,554
Shareholders' equity.................        75,305         65,537         24,071         18,236         17,702
</TABLE>


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

Overview

     Jevic was founded in 1981 after the deregulation of the trucking industry,
and has developed an operating system that combines the high revenue yield
characteristics of a typical LTL carrier with the operating flexibility and low
fixed costs of a truckload carrier. Most other motor carriers have continued to
specialize as either truckload, moving one shipment at a time, or
less-than-truckload, moving multiple small shipments through networks of up to
500 terminals.

     The Company's system uses a small number of regional facilities that serve
as origination points for consolidation of both small and large shipments. The
shipments are then loaded onto line-haul trailers in a sequence that permits
direct unloading at each shipment's destination, eliminating the need to
rehandle individual shipments at one or more breakbulk terminals. Management
focuses on adjusting freight mix to maximize asset utilization. The Company
maintains a high percentage of variable costs in order to minimize the impact of
short-term swings in demand.

                                       15

<PAGE>

     Because of the distinct nature of Jevic's operating system, the Company
believes that profitability measures and expense ratios traditionally used to
evaluate truckload or less-than-truckload carriers are generally not meaningful.
Jevic's results of operations have been impacted by two key trends. First, Jevic
has been increasing the percentage of its shipments transported by
owner-operators and outside line-haul purchased transportation companies, who
supply their own tractor and bear all associated expenses in return for a
contracted rate. As a result, purchased transportation has increased as a
percentage of operating revenues, offset by a reduction, as a percentage of
operating revenues, of drivers' salaries, wages and benefits, depreciation,
fuel, operating taxes and licenses and other supplies and operating expenses.
Additionally, Jevic has shifted from a policy of leasing revenue equipment to
purchasing revenue equipment. As a result, depreciation and interest expense has
increased as a percentage of operating revenues while lease expense, which is
included in supplies and other expenses, has decreased.

Results of Operations

     The following table sets forth for the periods indicated the percentage of
operating revenues represented by certain items in the Company's statements of
income:

                                                     Year Ended December 31,
                                                  -----------------------------
                                                   1998        1997        1996
                                                  -----       -----       -----
Operating revenues .........................      100.0%      100.0%      100.0%

Operating expenses:
     Salaries, wages and benefits ..........       50.5        50.2        52.5
     Supplies and other expenses ...........       17.4        18.8        21.2
     Purchased transportation ..............       12.0         9.9         7.0
     Depreciation and amortization .........        6.5         6.0         5.6
     Operating taxes and licenses ..........        4.6         4.8         5.6
     Insurance and claims ..................        1.8         2.1         2.1
     (Gain) loss on sale of equipment ......       (0.2)        0.1        (0.1)
                                                  -----       -----       -----
                                                   92.6        91.9        93.9
                                                  -----       -----       -----
Operating income ...........................        7.4         8.1         6.1
Interest expense, net ......................        0.6         1.5         1.9
Other income, net ..........................       (0.1)       (0.2)       (0.1)
                                                  -----       -----       -----
Income before income taxes .................        6.9%        6.8%        4.3%
                                                  =====       =====       =====

                                       16
<PAGE>


Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

     Operating Revenues. Operating revenues increased 18.5% in 1998 to $226.1
million from $190.8 million in 1997. The increase resulted primarily from a
14.5% increase in total shipments. In addition, revenue per shipment increased
3.2% to $288 in 1998 from $279 in 1997.

     Operating Expenses. Operating expenses increased 19.4% to $209.4 million in
1998 from $175.4 million in 1997. As a percentage of operating revenues,
operating expenses increased to 92.6% in 1998 from 91.9% in 1997. This increase
in operating expenses is primarily due to increased revenues, as the majority of
the Company's operating expenses are variable in nature. The percentage increase
was the result of the Company's increased use of outside line-haul purchased
transportation and local cartage.

     Salaries, wages and benefits increased 19.3% to $114.2 million in 1998 from
$95.7 million in 1997. As a percentage of operating revenues, salaries, wages
and benefits increased to 50.5 % in 1998 from 50.2 % in 1997. This percentage
increase was primarily due to the Company's hiring of additional personnel in
connection with the expansion of two facilities and the start up of two new
facilities.

     Supplies and other expenses, which primarily consist of operating leases,
fuel, tolls, tires, parts and bad debt expense, increased 9.4% to $39.4 million
in 1998 from $36.0 million in 1997. As a percentage of operating revenues,
supplies and other expenses decreased to 17.4% in 1998 from 18.8% in 1997. This
percentage decrease was primarily due to the Company's continuing shift toward
the purchase of revenue equipment rather than leasing such equipment under
operating leases, lower fuel prices, the Company's increased use of outside
line-haul purchased transportation and a reduction in bad debt expense in 1998.

     Purchased transportation increased 43.4% to $27.1 million in 1998 from
$18.9 million in 1997. As a percentage of operating revenues, purchased
transportation increased to 12.0% in 1998 from 9.9% in 1997. The increase was
due to the increased use of outside line-haul transportation and local cartage
to supplement the Company's fleet, as the owner-operator earnings in 1998
remained flat at 6% of operating revenues.

     Depreciation and amortization expense increased 28.7% to $14.8 million in
1998 from $11.5 million in 1997. As a percentage of operating revenues,
depreciation and amortization increased to 6.5% in 1998 from 6.0% in 1997. The
increase was primarily attributable to the Company's continuing shift toward the
purchase of additional and replacement revenue equipment rather than leasing
such equipment under operating leases and the Company's purchase of computer
hardware.

     Operating taxes and licenses increased 14.3% to $10.4 million in 1998 from
$9.1 million in 1997. As a percentage of operating revenues, operating taxes and
licenses decreased to 4.6% in 1998 from 4.8% in 1997. This percentage decrease
was primarily attributable to a decrease in fuel taxes due to the Company's
increased use of outside line-haul transportation providers, who pay for their
own taxes and licenses.

     Insurance and claims decreased 2.4% to $4.0 million in 1998 from $4.1
million in 1997. As a percentage of operating revenues, insurance and claims
decreased to 1.8% in 1998 from 2.1% in 1997. Increases in cargo claims and
environmental expenses were offset by favorable premiums on public liability and
property damage insurance coverages. In addition, the Company experienced
favorable development of claims in the public liability and property damage
segment.

                                       17

<PAGE>


     Interest Expense. Interest expense decreased 50.0% to $1.4 million in 1998
from $2.8 million in 1997. As a percentage of operating revenues, interest
expense decreased to 0.6% in 1998 from 1.5% in 1997. Interest expense decreased
due to the Company having paid off debt with part of the proceeds of the initial
public offering in October 1997 and the Company average debt balances being
lower during 1998.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

     Operating Revenues. Operating revenues increased 23.3% in 1997 to $190.8
million from $154.8 million in 1996. The increase resulted primarily from a
16.9% increase in total shipments. An additional factor in the increase was the
increase in average revenue per shipment, which resulted primarily from an
increase in the average shipment size.

     Operating Expenses. Operating expenses increased 20.6% to $175.4 million in
1997 from $145.4 million in 1996. Operating expenses as a percentage of
operating revenues decreased to 91.9% in 1997 from 93.9% in 1996. This increase
in operating expenses was primarily due to increased revenues, as the majority
of the Company's operating expenses tend to be variable in nature. The
percentage decreased was primarily the result of the Company's increased use of
owner-operators in addition to increased tractor utilization.

     Salaries, wages and benefits increased 17.9% to $95.7 million in 1997 from
$81.2 million in 1996. As a percentage of operating revenues, salaries, wages
and benefits decreased to 50.2% in 1997 from 52.5% in 1996. This percentage
decrease was primarily due to the Company's increased use of owner-operators in
1997.

     Supplies and other expenses, which primarily consist of operating leases,
fuel, tolls, tires, parts and bad debt expenses, increased 9.8% to $36.0 million
in 1997 from $32.8 million in 1996. As a percentage of operating revenues,
supplies and other expenses decreased to `18.8% in 1997 from 21.2% in 1996. This
percentage decrease was due to the Company's continuing shift toward the
purchase of revenue equipment rather than leasing such equipment under operating
leases, the Company's increased use of owner-operators and decreased fuel prices
in 1997.

     Purchased transportation increased 75.0% to $18.9 million in 1997 from
$10.8 million in 1996. As a percentage of operating revenues, purchased
transportation increased to 9.9% in 1997 from 7.0% in 1996. The increase was
primarily due to the increased use of owner-operators to supplement the
Company's fleet and as a substitute for higher cost, outside line-haul
transportation. As a percentage of total purchased transportation expense,
owner-operator expense increased to 60.4% in 1997 from 21.5% in 1996.

     Depreciation and amortization expense increased 32.2% to $11.5 million in
1997 from $8.7 million in 1996. As a percentage of operating revenues,
depreciation and amortization increased to 6.0% in 1997 from 5.6% in 1996. The
increase was primarily attributable to the Company's continuing shift toward the
purchase of additional and replacement revenue equipment rather than leasing
such equipment under operating leases.

     Operating taxes and licenses increased 4.6% to $9.1 million in 1997 from
$8.7 million in 1996. As a percentage of operating revenues, operating taxes and
licenses decreased to 4.8% in 1997 from 5.6% in 1996. This percentage decrease
was primarily attributable the Company's increased use of owner-operators, who
pay their own fuel taxes and licenses.

                                       18

<PAGE>


     Insurance and claims increased 24.2% to $4.1 million in 1997 from $3.3
million in 1996. As a percentage of operating revenues, insurance and claims
remained flat at 2.1%.

     Interest Expense. Interest expense decreased 6.7% to $2.8 million in 1997
from $3.0 million in 1996. As a percentage of operating revenues, interest
expenses decreased to 1.5% in 1997 from 1.9% in 1996. The decrease in interest
expense was primarily attributable to the repayment of long-term debt with a
portion of the proceeds of the Company's initial public offering.

Liquidity and Capital Resources

     The Company's primary sources of liquidity have been funds provided by
operations, equipment leases and bank borrowings. Net cash provided by operating
activities was approximately $23.9 million in 1998 compared to $18.4 million in
1997. The increase in cash provided by operations in 1998 is primarily
attributable to the Company's increased income before depreciation and
amortization expense and deferred income taxes.

     Capital expenditures, net of trade-in allowances, totaled approximately
$52.7 million in 1998 compared to $31.6 million in 1997. In 1998, the $52.7
million of capital expenditures were comprised of $26.4 million of revenue
equipment, $20.9 million for facilities and $5.4 million of other equipment.

     The Company has budgeted for total capital expenditures of $35 million in
1999. This budget includes $21.7 million to purchase new tractors and $6.6
million to purchase new trailers. In addition, the Company plans to purchase
$6.7 million of other equipment, primarily technology, during 1999. The Company
may spend up to an additional $10 million for new tractors and trailers. The
Company's cash flows from operations and bank borrowings will provide the
primary funding for the Company's planned capital expenditures.

     The Company generally purchases new line-haul tractors and replaces them
after three years. Regional and local tractors are replaced after five years,
depending on levels of use. The Company generated cash proceeds from sales of
used tractors of $2.2 million in 1998 versus $460,000 in 1997.

     Net cash provided by financing activities was approximately $19.4 million
in 1998 compared to net cash provided of $17.6 million in 1997. At December 31,
1998, total borrowings under long-term debt totaled $33.6 million, maturing
through 2009, and obligations relating to operating leases totaled $7.5 million
through 2013, of which $1.7 million related to a facility lease with the
Company's founders.

     Jevic is a party to a $35 million credit facility with First Union National
Bank. The credit facility includes a $10 million working capital revolving line
of credit, with borrowings limited to 80% of the Company's eligible accounts
receivable, as defined, and a $25 million equipment revolving line of credit
used to purchase or refinance revenue equipment. At December 31, 1998, there was
$1.0 million outstanding under the equipment revolver, $2.0 million outstanding
under the working capital revolver and an additional $450,000 of outstanding
standby letters of credit under the working capital revolver. The equipment
revolving line of credit is secured by a first priority, perfected security
interest in the revenue equipment purchased or refinanced. The rate of interest
on both lines of credit is, at the Company's election, either the Bank's base
rate (higher of the Federal Funds Rate plus 1/2 of 1% or the prime commercial
lending rate of First Union) or a rate based on the London Interbank Offered
Rate (LIBOR). The working capital line of credit expires in June 2003; the
equipment line of credit expires in June 2000. The agreement allows the Company
to convert outstanding amounts under the equipment revolver to term loans if the
line of credit is not renewed. The credit facility contains covenants made by

                                       19

<PAGE>


the Company, which limit its ability to make business acquisitions and pay
dividends on its capital stock, including the Common Stock, among other things.

     Jevic is also a party to an $18 million credit facility with PNC Bank. The
credit facility includes an $8 million working capital revolving line of credit,
with borrowings limited to 80% of the Company's eligible accounts receivable, as
defined, and a $10 million equipment revolving line of credit used to purchase
or refinance revenue equipment. At December 31, 1998, there were no borrowings
under the equipment revolver and no borrowings under the working capital
revolver. The equipment revolving line of credit is secured by a first priority,
perfected security interest in the revenue equipment purchased or refinanced.
The rate of interest on both lines of credit is, at the Company's election,
either the Bank's base rate (higher of the Federal Funds Rate plus 1/2 of 1% or
the prime commercial lending rate of PNC) or a rate based on the London
Interbank Offered Rate (LIBOR). The working capital line of credit expires in
June 2002; the equipment line of credit expires in July 1999. The agreement
allows the Company to convert outstanding amounts under the equipment revolver
to term loans at its discretion or if the line of credit is not renewed. At
December 31, 1998, $9.8 million in outstanding balances had been converted to
term loans with maturities to November 2002. The credit facility contains
covenants made by the Company, which limit its ability to make business
acquisitions and pay dividends on its capital stock, including the Common Stock,
among other things.

     The Company believes that its cash and cash equivalents, funds generated
from operations and available borrowings under its current or future credit
facilities will be sufficient to fund the Company's capital expenditure
requirements at least through 1999.

     While the Company may pursue selective acquisitions of businesses that are
complementary with its operations, the Company currently does not have any
commitments or agreements for any business acquisitions.

Inflation

     The Company does not believe that inflation has had a material impact on
its results of operations for the past three years.

Seasonality

     In the trucking industry, revenues generally follow a seasonal pattern as
customers reduce shipments during and after the winter holiday season. In
addition, highway transportation can be adversely affected depending upon the
severity of the weather in various sections of the country during the winter
months. The Company's operating expenses have historically been higher in winter
months, due primarily to decreased fuel efficiency and increased maintenance
costs for revenue equipment in colder weather. Accordingly, the Company's
results of operations may fluctuate to reflect such seasonality.

Year 2000 Compliance

     Many computer systems were not designed to handle dates beyond the year
1999, and, therefore, computer hardware and software will need to be modified
prior to the year 2000 in order to remain functional. If the hardware and
software are not Year 2000 compliant, system failures could occur which could
prevent the Company from conducting business.

                                       20

<PAGE>

     The Company has established a Year 2000 team consisting of management and
information technology employees to identify and address Year 2000 issues. This
team is responsible for ascertaining the Year 2000 compliance of the Company's
own computer systems, as well as determining the compliance level of the
Company's vendors and customers. The team is also responsible for establishing
contingency plans in the event that mission critical systems, vendors or
customers are not able to reach Year 2000 compliance.

     The Company is in the process of upgrading its primary computer platform in
order to provide increased enterprise computing and additional disaster recovery
capabilities. This new system was designed to be Year 2000 compliant and is
anticipated to be fully operational as of June 30, 1999.

     The Company is in the process of implementing a new financial reporting
system. While the new system is being implemented primarily due to the growth of
the Company and the resulting demand for greater speed and flexibility in
financial reporting, the timing of the implementation was accelerated because of
the Year 2000 compliance requirement. The Company is also upgrading the payroll
processing package it uses from an outside payroll provider on an accelerated
basis. Total expenditures associated with these two projects are expected to be
approximately $600,000 including hardware, licensing fees and consulting fees.

     The Company's Year 2000 team has assessed the level of Year 2000 compliance
of the Company's other computer hardware and software components. The assessment
included analyzing the compatibility of all personal computers and their
operating systems, as well as all third party software packages currently used
by the Company. The Company is currently taking the actions required to bring
all personal computers and software packages into Year 2000 compliance.
Management does not expect the costs associated with any required conversions of
such other systems to ensure Year 2000 compliance to be significant.

     The Company has contacted its mission critical vendors requesting
information regarding their Year 2000 compliance. Significant customers have
also been contacted to determine the extent of their Year 2000 compliance. The
Company has not received sufficient information to properly assess whether
vendors and customers will be Year 2000 compliant in time to avoid business
interruptions. In the event that any of the Company's significant vendors or
customers do not successfully achieve Year 2000 compliance on a timely basis,
the Company's business or operations could be adversely affected.

     The Company has begun preparing a contingency plan to address potential
problem areas with vendors and other third parties. It is expected that
assessment, remediation and contingency planning activities will be ongoing
throughout the remainder of 1999. All identifiable material third party issues
will be resolved in 1999.

     Assuming substantial Year 2000 compliance by the Company's significant
vendors and customers, the Company does not expect Year 2000 related
expenditures to have a material adverse impact on its financial condition or
results of operations.

Cautionary Statement for Forward Looking Information

     Statements included in this Management's Discussion and Analysis of
Financial Condition and Results of Operations may contain forward-looking
statements. There are a number of risks and uncertainties that could cause
actual results to differ materially from those anticipated by the statements
made above. These include, but are not limited to, general economic factors,
availability of employee drivers and owner-operators, capital requirements,
competition, acquisition of revenue equipment, unionization, fuel, seasonality,
claims exposure and insurance costs, difficulty in managing growth, regulation,
environmental hazards and dependence on key personnel. Further information on
these and other factors which could affect the Company's financial results can
be found in the Company's periodic reports on forms 10-K and 10-Q.

                                       21

<PAGE>

Item 7a.  Quantitative And Qualitative Disclosure about Market Risk

The table below sets forth information about the Company's financial
instruments including debt obligations and an interest rate swaps. For debt
obligations, the table presents principal cash flows and related weighted
average interest rates by expected maturity dates. For interest rate swaps, the
table presents notional amounts and weighted average interest rates by
contractual maturity dates. Weighted average variable rates are based on implied
forward rates in the yield curve at the reporting date. Variable interest rates
on the Company's loans are adjusted based on the Company's level of compliance
with certain financial covenants, as defined. This table assumes that the
Company's level of compliance will be consistent within December 31, 1998
levels.

<TABLE>
<CAPTION>

                                                                 Expected Maturity Date
                                  ----------------------------------------------------------------------------------------
                                                                      December 31,                                  Fair
                                    1999        2000        2001       2002       2003    Thereafter    Total       Value
                                  -------     -------     -------     ------     ------   ----------   -------     -------
                                                                     (In thousands)
<S>                               <C>         <C>         <C>           <C>      <C>       <C>         <C>         <C>
Debt Obligations
----------------

Long-term debt
Fixed Rate                        $ 1,196     $ 1,266     $ 1,402       $861     $1,630    $12,189     $18,544     $18,544

Weighted average interest rate       7.50%       7.52%       7.56%      7.55%      7.50%      7.50%       7.51%

Variable Rate                     $ 1,431     $ 1,522     $ 1,610     $5,647     $  141    $ 4,740     $15,091     $15,091

Weighted average interest rate       5.60%       5.63%       5.69%      5.74%      5.80%      5.84%       


Interest rate derivatives
-------------------------

Variable to fixed:
Notional amount                   $13,660     $12,138     $10,528     $4,881     $4,740     $4,740     $15,091
Average pay rate (fixed)             6.36%       6.44%       6.56%      7.65%      7.65%      7.65%
Average receive rate (variable)      5.60%       5.63%       5.69%      5.74%      5.80%      5.84%
</TABLE>

Item 8. Financial Statements

     The Company's consolidated financial statements appear on pages F-1 through
F-17, as set forth in Item 14.

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

     None.


                                    PART III

Item 10. Directors and Executive Officers of the Registrant

     Information concerning directors, appearing under the caption "Election of
Directors" in the Company's Proxy Statement (the "Proxy Statement") to be filed
with the Securities and Exchange Commission in connection with the Annual
Meeting of Shareholders scheduled to be held on May 14, 1999, information
concerning executive officers, appearing under the caption "Item 1. Business -


                                       22

<PAGE>

Executive Officers of the Company" in Part I of this Form 10-K, and information
under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in
the Proxy Statement are incorporated herein by reference in response to this
Item 10.

Item 11. Executive Compensation

     The information contained in the section titled "Executive Compensation" in
the Proxy Statement, with respect to executive compensation, and the information
contained in the section entitled "Director Compensation" with respect to
director compensation, are incorporated herein by reference to this Item 11.

Item 12. Security Ownership of Certain Beneficial Owners and Management

     The information contained in the sections titled "Security Ownership of
Certain Beneficial Owners" and "Security Ownership of Management" in the Proxy
Statement, with respect to security ownership of certain beneficial owners and
management, is incorporated herein by reference to this Item 12.

Item 13. Certain Relationships and Related Transactions

     The information contained in the section titled "Certain Relationships and
Transactions" in the Proxy Statement, with respect to certain relationships and
related transactions, is incorporated herein by reference to this Item 13.


                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 10-K

(a)  (1) Financial Statements

The financial statements listed in the accompanying Index to Consolidated
Financial Statements are filed as part of this Form 10-K, commencing on page
F-1.

     (2)  Schedules

The following consolidated financial statement schedule of the Company is filed
as part of this Form 10-K on page F-17:

          Schedule II - Valuation and Qualifying Accounts

     (3)  Exhibits

                                       23

<PAGE>

Exhibit No.                        Description

*  3.1    Articles of Incorporation of the Company (Exhibit 3.1 to the Company's
          Form S-1 Registration Statement, No. 333-33469 (the "1997 Registration
          Statement")).

*  3.2    By-laws of the Company (Exhibit 3.2 to the 1997 Registration
          Statement).

+*10.1    1997 Incentive Plan. (Exhibit 10.1 to the Company's Annual Report on
          Form 10-K for the year ended December 31, 1997 (the "1997 Form 10-K"))

+*10.2    1994 Stock Option Plan (Exhibit 10.2 to the 1997 Registration
          Statement).

* 10.3    Employee Stock Purchase Plan (Exhibit 10.5 to the 1997 Form 10-K).

+*10.4    401(K) Profit Sharing Plan (Exhibit 10.4 to the 1997 Registration
          Statement).

* 10.5    Supplemental Executive Retirement Plan (Exhibit 10.5 to the 1997
          Form 10-K).

* 10.6    Promissory Note, dated April 14, 1997, made by Karen B. Muhlschlegel,
          as Trustee of the Karen B. Muhlschlegel 1996 Grantor Annuity Trust, in
          favor of the Company in the principal amount of $218,772 (Exhibit 10.8
          to the 1997 Registration Statement).

* 10.7    Promissory Note, dated April 14, 1997, made by Harry J. Muhlschlegel,
          as Trustee of the Harry J. Muhlschlegel 1996 Grantor Annuity Trust, in
          favor of the Company in the principal amount of $219,293 (Exhibit 10.9
          to the 1997 Registration Statement).

* 10.8    Lease Agreement made and entered into as of April 12, 1995 among Harry
          J. Muhlschlegel and Karen Muhlschlegel and the Company (Exhibit 10.10
          to the 1997 Registration Statement).

* 10.9    Amendment to Lease Agreement made and entered into as of September 15,
          1997 among Harry J. Muhlschlegel and Karen Muhlschlegel and the
          Company (Exhibit 10-9 to the 1997 Form 10-K).

* 10.10   Real Estate Sale Agreement made and entered into as of November 7,
          1997 among Harry J. Muhlschlegel and Karen Muhlschlegel and the
          Company (Exhibit 10.10 to the 1997 Form 10-K).

* 10.11   Lease Agreement between James F. Lomma, as Landlord, and the Company,
          as Tenant, dated June 1, 1995, as amended (Exhibit 10.12 to the 1997
          Registration Statement).

* 10.12   Commercial Lease Agreement made and effective March 1, 1997 by and
          between 864 Realty Trust and the Company (Exhibit 10.13 to the 1997
          Registration Statement).

* 10.13   Lease Agreement made and entered into the 7th day of March, 1996 by
          and between Little Brownie Properties, Inc. and the Company (Exhibit
          10.14 to the 1997 Registration Statement).

* 10.14   Agreement of Lease made and entered into between Dongary Investments,
          Ltd. and the Company dated March 31, 1994 (Exhibit 10.15 to the 1997
          Registration Statement).

                                       24
<PAGE>

* 10.15   Credit Agreement, dated June 28, 1996, between the Company and
          CoreStates Bank, N.A. (Exhibit 10.16 to the 1997 Registration
          Statement).

* 10.16   Security Agreement, dated as of June 28, 1996, by and between the
          Company and CoreStates Bank, N.A. (Exhibit 10.17 to the 1997
          Registration Statement).

* 10.17   Promissory Note, dated October 31, 1995, made by the Company in favor
          of MetLife Capital Financial Corporation (Exhibit 10.18 to the 1997
          Registration Statement).

* 10.18   Mortgage Security Agreement, Assignment of Leases and Rents and
          Fixture Filing, made as of October 31, 1995, by the Company in favor
          of MetLife Capital Financial Corporation (Exhibit 10.19 to the 1997
          Registration Statement).

* 10.19   Tax Indemnity Agreement (Exhibit 10.20 to the 1997 Registration
          Statement).

* 10.20   Amended and Restated Credit Agreement between Jevic Transportation,
          Inc. and First Union National Bank, Dated June 22, 1998 (Exhibit 10.21
          to the Company's Quarterly Report on Form 10-Q for the quarter ended
          June 30, 1998).

* 21      Subsidiaries of Registrant (Exhibit 21 to the 1997 Form 10-K).

  23      Consent of Arthur Andersen LLP.

  27      Financial Data Schedule.

---------
*    Incorporated by reference.

+    Management contract or compensatory plan or arrangement.

(b)  No reports were filed on Form 8-K during the last quarter of fiscal 1998.

                                       25

<PAGE>

SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized, on the 30th
day of March, 1999.


                                            JEVIC TRANSPORTATION, INC.

                                            By: /s/ Harry J. Muhlschlegel
                                                -------------------------------
                                                Harry J. Muhlschlegel
                                                Chief Executive Officer


                                            By: /s/ Brian J. Fitzpatrick
                                                -------------------------------
                                                Brian J. Fitzpatrick
                                                Senior Vice President and
                                                Chief Financial Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on March 30, 1999, in the
capacities indicated:

<TABLE>
<CAPTION>

       Signature                                  Title
       ---------                                  -----
<S>                                 <C>
/s/ Harry J. Muhlschlegel           Chief Executive Officer and Chairman of 
-----------------------------       the Board (Principal Executive Officer) 
Harry J. Muhlschlegel               


/s/ Karen B. Muhlschlegel           Vice President, Secretary and Director
-----------------------------      
Karen B. Muhlschlegel


/s/ Paul J. Karvois                 President, Chief Operating Officer and 
-----------------------------       Director                               
Paul J. Karvois                      


/s/ Brian J. Fitzpatrick            Senior Vice President and Chief 
-----------------------------       Financial Officer               
Brian J. Fitzpatrick                


/s/ Gordon R. Bowker                Director
-----------------------------       
Gordon R. Bowker


/s/ Samuel H. Jones, Jr.            Director
-----------------------------
Samuel H. Jones, Jr.
</TABLE>


<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

             INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

                                                                           PAGE
                                                                           ----
Report of Independent Public Accountants.................................  F-2

Consolidated Balance Sheets..............................................  F-3

Consolidated Statements of Income........................................  F-4

Consolidated Statements of Shareholders' Equity..........................  F-5

Consolidated Statements of Cash Flows....................................  F-6

Notes to Consolidated Financial Statements...............................  F-7

Consolidated Financial Statement Schedule:

      II. Valuation and Qualifying Accounts..............................  F-17


                                       F-1

<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Jevic Transportation, Inc.:

We have audited the accompanying consolidated balance sheets of Jevic
Transportation, Inc. (a New Jersey corporation) and subsidiaries as of December
31, 1998 and 1997, and the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1998. These financial statements and the schedule referred to
below are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and schedule based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 statement 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 Jevic Transportation, Inc. and
subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the Index to
Consolidated Financial Statements and Schedule is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not a part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in our audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.


                                            ARTHUR ANDERSEN LLP

Philadelphia, PA.
  February 12, 1999


                                      F-2

<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    (in thousands, except for share amounts)

<TABLE>
<CAPTION>

                                                                                    DECEMBER 31,
                                                                              -----------------------
                                                                                 1998          1997
                                                                              ---------     ---------
<S>                                                                           <C>           <C>
                               ASSETS
CURRENT ASSETS:
   Cash and cash equivalents ............................................     $      82     $   7,185
   Accounts receivable, less allowance for doubtful
       accounts of $1,105 and $1,527, respectively ......................        24,733        21,792
   Prepaid expenses and other ...........................................         6,058         3,172
   Deferred income taxes ................................................         1,452         1,862
                                                                              ---------     ---------
       Total current assets .............................................        32,325        34,011
PROPERTY AND EQUIPMENT, net .............................................       114,006        77,894
OTHER ASSETS ............................................................         1,508         1,463
                                                                              ---------     ---------
                                                                              $ 147,839     $ 113,368
                                                                              =========     =========

            LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Current portion of long-term debt ....................................     $   2,627     $   1,976
   Line of credit .......................................................         3,000            --
   Accounts payable .....................................................         6,705         6,313
   Accrued salaries, wages and benefits .................................         2,918         2,178
   Other accrued expenses ...............................................         4,621         3,375
   Claims and insurance reserves ........................................         3,533         3,917
   Accrued income taxes .................................................           163           648
   Deferred freight revenues ............................................         2,268         1,752
                                                                              ---------     ---------
       Total current liabilities ........................................        25,835        20,159
                                                                              ---------     ---------
LONG-TERM DEBT ..........................................................        31,008        15,679
                                                                              ---------     ---------
DEFERRED INCOME TAXES ...................................................        15,641        11,782
                                                                              ---------     ---------
OTHER LIABILITIES .......................................................            50           211
                                                                              ---------     ---------

COMMITMENTS AND CONTINGENCIES (Note 11)

SHAREHOLDERS' EQUITY:
   Preferred Stock, no par value, 10,000,000 shares
       authorized; none issued and outstanding ..........................            --            --
   Common Stock, no par value, 40,000,000 shares
       authorized; 4,976,197 and 4,918,656 shares issued and outstanding,
       respectively ....................................................            --            --
   Class A Common Stock, no par value, 10,000,000 shares
       authorized; 5,739,544 shares issued and
       outstanding, .....................................................            --            --
   Additional paid-in capital ...........................................        72,263        71,816
   Retained earnings(accumulated deficit) ...............................         3,042        (6,279)
                                                                              ---------     ---------
       Total shareholders' equity .......................................        75,305        65,537
                                                                              ---------     ---------
                                                                              $ 147,839     $ 113,368
                                                                              =========     =========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       F-3

<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                      (in thousands, except per share data)

                                                YEAR ENDED DECEMBER 31,
                                        ---------------------------------------
                                           1998           1997           1996
                                        ---------      ---------      ---------
OPERATING REVENUES .................    $ 226,123      $ 190,821      $ 154,799
                                        ---------      ---------      ---------
OPERATING EXPENSES:
   Salaries, wages and benefits ....      114,181         95,739         81,215
   Supplies and other expenses .....       39,427         35,983         32,824
   Purchased transportation ........       27,109         18,913         10,761
   Depreciation and amortization ...       14,801         11,465          8,732
   Operating taxes and licenses ....       10,393          9,066          8,722
   Insurance and claims ............        3,970          4,071          3,325
   (Gain) loss on sales of equipment         (444)           145           (170)
                                        ---------      ---------      ---------
                                          209,437        175,382        145,409
                                        ---------      ---------      ---------
         Operating income ..........       16,686         15,439          9,390
INTEREST EXPENSE, net ..............        1,431          2,836          2,966
OTHER, net .........................         (192)          (401)          (200)
                                        ---------      ---------      ---------
         Income before income taxes        15,447         13,004          6,624
INCOME TAXES .......................        6,126         10,586            429
                                        ---------      ---------      ---------
NET INCOME .........................    $   9,321      $   2,418      $   6,195
                                        =========      =========      =========
Basic net income per share .........    $    0.87      $    0.31      $    0.90
                                        =========      =========      =========
Diluted net income per share .......    $    0.86      $    0.30      $    0.88
                                        =========      =========      =========

PRO FORMA DATA (UNAUDITED) (Note 2):
   Income before income taxes....................      $  13,004
   Pro forma income taxes........................          5,202
                                                       ---------
   Pro forma net income..........................      $   7,802
                                                       =========
   Pro forma basic net income per share..........      $    0.94
                                                       =========
   Pro forma diluted net income per share........      $    0.92
                                                       =========


        The accompanying notes are an integral part of these statements.


                                       F-4

<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                    (in thousands, except for share amounts)

<TABLE>
<CAPTION>

                                                                NUMBER OF SHARES                        RETAINED
                                                            ------------------------      ADDITIONAL    EARNINGS
                                                             CLASS A                        PAID-IN    (ACCUMULATED
                                                             COMMON         COMMON          CAPITAL       DEFICIT)     TOTAL
                                                            ---------      ---------       ----------  ------------   -------
<S>                                                         <C>            <C>              <C>           <C>         <C>
Balance, December 31, 1995..............................    6,858,200             --        $ 1,014       $17,222     $18,236
   Net income...........................................           --             --             --         6,195       6,195
   Contribution of capital..............................           --             --            114            --         114
   Net distributions to shareholders....................           --             --             --          (474)       (474)
                                                            ---------      ---------        -------       -------     -------
Balance, December 31, 1996..............................    6,858,200             --          1,128        22,943      24,071
                                                            ---------      ---------        -------       -------     -------
   Net income...........................................           --             --             --         2,418       2,418
   Conversion of Class A Common Stock to Common Stock...   (1,118,656)     1,118,656             --            --          --
   Net proceeds from issuance of Common Stock...........           --      3,800,000         52,109            --      52,109
   Termination of S corporation status..................           --             --         18,579       (18,579)         --
   Deemed dividend to shareholders on purchase
     of facility                                                   --             --             --          (406)       (406)
   Net distributions to S Corporation shareholders......           --             --             --       (12,655)    (12,655)
                                                            ---------      ---------        -------       -------     -------
Balance, December 31, 1997..............................    5,739,544      4,918,656         71,816        (6,279)     65,537
                                                            ---------      ---------        -------       -------     -------
   Net income ..........................................           --             --             --         9,321       9,321
   Proceeds from sale of Common Stock through
      Employee Stock Purchase Plan......................           --         57,541            447            --         447
                                                            ---------      ---------        -------       -------     -------
Balance, December 31, 1998..............................    5,739,544      4,976,197        $72,263       $ 3,042     $75,305
                                                            =========      =========        =======       =======     =======
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       F-5

<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                       YEAR ENDED DECEMBER 31,
                                                                ------------------------------------
                                                                  1998          1997          1996
                                                                --------      --------      --------
<S>                                                             <C>           <C>           <C>
OPERATING ACTIVITIES:
   Net income .............................................     $  9,321      $  2,418      $  6,195
   Adjustments to reconcile net income to net
       cash provided by operating activities:
         Depreciation and amortization ....................       14,801        11,465         8,732
         (Gain) loss on sales of equipment ................         (444)          145          (170)
         Provision for doubtful accounts ..................          127           937           629
         Deferred income tax provision ....................        4,270         9,359           224
         Changes in operating assets and liabilities --
             Increase in accounts receivable ..............       (3,069)       (5,260)       (3,272)
             (Increase) decrease in prepaid
                expenses and other ........................       (2,886)         (837)          245
             Increase in other assets .....................          (57)         (109)         (934)
             Increase (decrease) in accounts payable ......          392        (1,389)          721
             Increase (decrease) in accrued salaries, wages
                and benefits ..............................          740           (55)          761
             Increase in other accrued expenses ...........        1,088            91         1,667
             Increase (decrease) in claims and insurance
                reserves ..................................         (385)          532           619
             Increase (decrease) in accrued income taxes ..         (485)          594            54
             Increase in deferred freight revenues ........          516           507            25
                                                                --------      --------      --------
                Net cash provided by operating
                   activities .............................       23,929        18,398        15,496
                                                                --------      --------      --------
INVESTING ACTIVITIES:
   Proceeds from sales of equipment .......................        2,247           460           108
   Purchases of property and equipment ....................      (52,707)      (31,649)      (20,679)
                                                                --------      --------      --------
                Net cash used in investing
                   activities .............................      (50,460)      (31,189)      (20,571)
                                                                --------      --------      --------
FINANCING ACTIVITIES:
   Net borrowings on line of credit .......................        3,000            --            --
   Payments of long-term debt .............................       (6,210)      (36,160)       (9,210)
   Proceeds from issuance of long-term debt ...............       22,191        15,539        16,110
   Proceeds from issuance of capital stock ................           --        52,109            --
   Payments of capital lease obligations ..................           --        (1,260)         (958)
   Net contributions from (distributions to) shareholders .           --       (12,655)          390
   Proceeds from sale of Common Stock through
          Employee Stock Purchase Plan ....................          447            --            --
                                                                --------      --------      --------
                Net cash provided by financing
                   activities .............................       19,428        17,573         6,332
                                                                --------      --------      --------
NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS ............................................       (7,103)        4,782         1,257
CASH AND CASH EQUIVALENTS, BEGINNING OF
   YEAR ...................................................        7,185         2,403         1,146
                                                                --------      --------      --------
CASH AND CASH EQUIVALENTS, END OF YEAR ....................     $     82      $  7,185      $  2,403
                                                                ========      ========      ========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       F-6

<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BACKGROUND

Jevic Transportation, Inc. (the "Company") is a motor carrier engaged in
interregional and regional transportation of general commodity freight in the
United States. The Company's operating system combines the high revenue yield
characteristics of LTL carriers with the operating flexibility and variable cost
structure of truckload carriers. The Company is a New Jersey corporation that
was founded in 1981. The Company completed an initial public offering of its
Common Stock effective October 7, 1997, selling 3,800,000 shares for net
proceeds of $52,109,000.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries. All intercompany accounts and transactions have
been eliminated.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.

PREPAID EXPENSES AND OTHER

At December 31, 1998, prepaid expenses and other includes $2,170,000 of prepaid
income taxes related to overpayments of 1998 estimated taxes.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Major additions and improvements are
capitalized, while maintenance and repairs that do not improve or extend the
life of assets are charged to expense as incurred. Gain or loss on retirement or
disposal of assets is included in income. For like-kind exchanges, any excess of
the trade-in allowance over the net book value of the traded asset is deferred
in the basis of the new asset.

In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Software
Developed or Obtained for Internal Use." This statement requires for financial
statements with fiscal years beginning after December 15, 1998, that certain
costs related to the development or purchase of internal-use software be
capitalized and amortized over the estimated useful life of the software, and
also requires that costs related to the preliminary project stage and post
implementation/operations stage in an internal-use software development project
be charged to expense as incurred. The Company early adopted SOP 98-1 in 1998,
and capitalized approximately $500,000 of internally developed software costs
related to an ongoing systems project. Such costs included approximately
$300,000 of wages and benefits for software developers employed by the Company
and approximately $200,000 paid to outside consultants. These costs will be
amortized over the estimated useful life of the software beginning when the new
system is placed in service in 1999.


                                       F-7

<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

1. BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

PROPERTY AND EQUIPMENT - (Continued)

Depreciation and amortization are provided using the straight-line method over
the following estimated useful lives:

<TABLE>
<S>                                              <C>
Revenue equipment                                3 to 10 years  (0% to 20% salvage value)
Furniture and fixtures and other equipment       5 to 10 years
Building and improvements                        20 to 35 years
Leasehold improvements                           lease term
</TABLE>

TIRES

The cost of original tires on revenue equipment is included in and depreciated
as part of the total revenue equipment cost. Replacement tires are charged to
expense when placed in service.

OTHER ASSETS

At December 31, 1998 and 1997, other assets include $347,000 and $678,000,
respectively, of cash surrender value related primarily to a life insurance
policies on certain of the Company's officers. At December 31, 1997, the cash
surrender value related primarily to a $3,000,000 life insurance policy on the
Company's Chief Executive Officer, net of loans of $121,000.

REVENUE RECOGNITION

The Company recognizes revenue in accordance with the Emerging Issues Task Force
of the Financial Accounting Standards Board Issue 91-9, "Revenue and Expense
Recognition in Freight Services in Process." Although the Company moves freight
under contractual arrangements with its shippers, revenue is recognized on the
delivery date and billing generally occurs on the pick-up date. At December 31,
1998 and 1997, the Company had deferred freight revenues of $2,268,000 and
$1,752,000, respectively.

CLAIMS AND INSURANCE RESERVES

Claims and insurance reserves reflect the estimated cost of claims for cargo
loss and damage, bodily injury and property damage, collision, workers'
compensation and group health (see Note 11). The related costs are charged to
insurance and claims expense except for workers' compensation and group health,
which are charged to salaries, wages and benefits.

INCOME TAXES

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases measured using enacted tax rates. The Company accounts for certain income
and expense items for financial reporting purposes differently than for income
tax purposes. The principal differences relate to the use of accelerated tax
depreciation for income tax purposes and certain financial statement reserves
that are not currently deductible for income tax purposes.

The Company was subject to taxation under Subchapter "S" of the Internal Revenue
Code from 1990 until the termination of its S Corporation status concurrent with
its initial public offering in October 1997. Accordingly, prior to the offering,
no provision was made for federal or certain state income taxes and the
Company's shareholders were taxed directly on their proportionate share of the
Company's taxable income. In connection with the offering, the Company
terminated its S Corporation status and became subject to federal and state
income taxes. The Company recorded a one-time non-cash charge of $8,459,000 for
the increase in the Company's net deferred tax liability resulting from the S
Corporation termination (see Note 7).

                                       F-8

<PAGE>

                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

1. BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

NET INCOME PER SHARE

The Company follows SFAS No. 128, "Earnings Per Share", which requires a dual
presentation of basic and diluted earnings per share. This statement established
new standards for computing and presenting earnings per share and requires the
restatement of prior year amounts. The Company adopted SFAS No. 128 effective
December 31, 1997.

Basic earnings per share is calculated by dividing net income by the weighted
average number of shares of Common Stock outstanding for the period. Diluted
earnings per share is calculated by dividing net income by the weighted average
number of shares of Common Stock outstanding for the period, adjusted for the
dilutive effect of Common Stock equivalents, which consist of stock options,
using the treasury stock method. The table below sets forth the reconciliation
of the numerators and denominators of the basic and diluted net income per share
computations (in thousands, except per share amounts):

<TABLE>
<CAPTION>

                                                              Year Ended December 31,
                              --------------------------------------------------------------------------------------
                                         1998                           1997                          1996
                              ---------------------------    -------------------------     -------------------------
                                                  Per                           Per                           Per
                                Net               Share       Net               Share       Net               Share
                              Income    Shares    Amount     Income    Shares   Amount     Income   Shares    Amount
<S>                           <C>       <C>      <C>         <C>        <C>     <C>        <C>       <C>      <C>   
Basic net income per share    $ 9,321   10,682   $  0.87     $ 2,418    7,754   $ 0.31     $6,195    6,858    $ 0.90
Effect of dilutive
  securities                       --      132     (0.01)         --      193    (0.01)        --      143     (0.02)
                              -------   ------   --------    -------   ------   ------     ------    -----    ------
Diluted net income per share  $ 9,321   10,814   $  0.86     $ 2,418    7,947   $ 0.30     $6,195    7,001     $0.88
                              =======   ======   =======     =======   ======   ======     ======    =====    ======
</TABLE>

The 1998 computation excludes options to purchase 120,000 shares of Common Stock
that are not dilutive. The Company's weighted average shares of Common Stock
outstanding include Class A Common Stock for all periods presented and Common
Stock from the effective date of the Company's initial public offering.

NEW ACCOUNTING PRONOUNCEMENTS

In 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income."
SFAS No. 130 requires the reporting and disclosure of comprehensive income and
its components, including net income. Management notes that SFAS No. 130 does
not have a material effect on the Company's financial reporting as the Company
did not have any other comprehensive income items during all periods presented
for the year ended December 31, 1998.

In 1998, the Company adopted SFAS No. 131, "Disclosure About Segments of an
Enterprise and Related Information." SFAS No. 131 requires that business segment
financial information be reported in the financial statements utilizing the
management approach, which is defined as the way management organizes segments
within the enterprise for making operating decisions and assessing performance.
Management believes the Company operates in one business segment, therefore the
adoption of SFAS No. 131 had no impact on the Company's financial statements.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
establishes standards for reporting and classification of derivatives on the
balance sheet as assets or liabilities, measured at fair value. Gains or losses
resulting from changes in the values of those derivatives would be accounted for
depending on the use of the derivative and whether it qualifies for hedge
accounting. SFAS No. 133 is effective for fiscal years beginning after June 15,
1999. Management does not believe the adoption of SFAS No. 133 will have a
significant impact on the Company's financial statements.

SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended December 31, 1998, 1997 and 1996, the Company paid interest
of $1,708,000, $3,291,000 and $3,120,000, respectively, and income taxes of
$4,018,000, $726,000 and $234,000, respectively.

                                       F-9
<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

SUPPLEMENTAL CASH FLOW INFORMATION - (Continued)

In November 1997, the Company purchased an operating facility from its
shareholders (see Note 10). In December 1995, the Company recorded a receivable
of $750,000 from its shareholders related to income taxes, which was repaid in
1996 (see Note 10).

The Company accounts for equipment purchases that involve trade-ins as like-kind
exchanges. Accordingly, for the year ended December 31, 1998 and 1997, purchases
of property and equipment are presented net of trade-in allowances of $3,302,000
and $3,904,000, respectively.

2. PRO FORMA DATA (UNAUDITED)

Immediately preceding the Company's initial public offering, the Company
terminated its status as an S Corporation and became subject to federal and
state income taxes. Accordingly, for informational purposes, the accompanying
statement of income for the year ended December 31, 1997 includes a pro forma
adjustment to reflect the income taxes that would have been recorded had the
Company been a C Corporation for the entire year, based on the tax laws in
effect during the period. Pro forma income taxes do not include the one-time
income tax provision of $8,459,000 related to the recognition of an increase in
the net deferred tax liability that was recorded by the Company upon terminating
its S Corporation status.

Pro forma basic and diluted net income per share is computed in accordance with
SFAS No. 128 (see Note 1) after giving effect to the weighted average number of
shares that would be required to be sold at the initial public offering price of
$15.00 per share, less underwriting discounts and commissions and estimated
offering expenses to fund the $10,000,000 of estimated S Corporation
distributions in October 1997.

3. RISKS AND UNCERTAINTIES

The Company's operations involve a number of risks and uncertainties. Factors
that could affect the Company's future operating results and cause actual
results to vary materially from expectations include, but are not limited to,
general economic factors, availability of employee drivers and owner-operators,
capital requirements, competition, unionization, fuel, seasonality, claims and
insurance costs, difficulty in managing growth, regulation, environmental
hazards and dependence on key personnel.

Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of trade accounts receivable. The Company does not
require collateral or other securities to support customer receivables. A
significant portion of the Company's operating revenues is derived from sales to
customers in the chemical industry, and the majority of the Company's operating
revenues are derived from sales to customers located in the Northeast. However,
no single customer accounts for more than 10% of the Company's operating
revenues.

4. PROPERTY AND EQUIPMENT

                                                              DECEMBER 31,
                                                        -----------------------
                                                          1998            1997
                                                        --------       --------
                                                             (in thousands)
Revenue equipment.....................................  $100,351       $ 81,107
Furniture and fixtures and other equipment............    17,219         12,125
Land, building and improvements.......................    34,394         13,294
Leasehold improvements................................       890            785
Construction in progress..............................        71            411
                                                        --------       --------
                                                         152,925        107,722
Less - Accumulated depreciation and amortization......   (38,919)       (29,828)
                                                        --------       --------
                                                        $114,006       $ 77,894
                                                        ========       ========

                                      F-10
<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

5. LINE OF CREDIT

The Company has a $10,000,000 working capital revolving line of credit with a
bank. The rate of interest on the line is either the bank's base rate (higher of
the Federal Funds rate plus 1/2 of 1% or the prime commercial lending rate of
the bank) or a rate based on the London Interbank Offered Rate (LIBOR). Interest
on the line is payable monthly, and the line extends through June 2003. At
December 31, 1998, $7,550,000 was available under the line as the outstanding
balance was $2,000,000 and $450,000 in stand-by letters of credit were
outstanding. In addition, the Company has $575,000 of stand-by letters of credit
outstanding with another bank.

The Company also has an $8,000,000 working capital revolving line of credit with
another bank. The rate of interest on the line is either the bank's base rate
(higher of the Federal Funds rate plus 1/2 of 1% or the prime commercial lending
rate of the bank) or a rate based on the London Interbank Offered Rate (LIBOR).
Interest on the line is payable monthly, and the line extends through July 2000.
At December 31, 1998, $8,000,000 was available under the line, as there were no
borrowings during 1998.

The lines are cross-defaulted with certain long-term debt and the equipment
lines (see Note 6). The corresponding loan agreements require the Company to
maintain certain financial and nonfinancial covenants, as defined, the most
restrictive of which limits the payment of dividends and business acquisitions.

6. LONG-TERM DEBT

<TABLE>
<CAPTION>

                                                                                        DECEMBER 31,
                                                                                    --------------------
                                                                                      1998        1997
                                                                                    -------       ------
                                                                                        (In thousands)
<S>                                                                                 <C>           <C>
Various installment notes, monthly principal payments plus
   interest at rates ranging from 4.9% to 8.0%,
   collateralized by revenue and other equipment, due through                       $ 6,394       $8,627
   June 2007 ...................................................................

Term notes, monthly principal payments plus interest at variable
   interest rates, collateralized by revenue and other equipment,
   due through November 2002 ...................................................      9,745           --

Mortgage notes, monthly payments of principal and interest of
   $89,600, final balloon payments of $9,767,000 due November 2009,
   interest at rates ranging from 7.0% to 7.7%, collateralized by facilities....     12,150           --

Mortgage note, monthly payments of principal and interest of
   $45,000, final balloon payment of $4,628,000 due October 2005,
   interest at commercial paper plus 225 basis points
   collateralized by facility ..................................................      5,346        5,426

Term notes with bank, repaid in 1998                                                     --        3,602
                                                                                    -------       ------
                                                                                     33,635       17,655
Less - Current portion..........................................................     (2,627)      (1,976)
                                                                                    -------      -------
                                                                                    $31,008      $15,679
                                                                                    =======      =======

Aggregate maturities of long-term debt at December 31, 1998, are as follows:

    1999........................................................................          $ 2,627
    2000........................................................................            2,788
    2001........................................................................            3,012
    2002........................................................................            6,508
    2003........................................................................            1,771
    Thereafter..................................................................           16,929
                                                                                          -------
                                                                                          $33,635
                                                                                          =======
</TABLE>

                                      F-11

<PAGE>

                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

6. LONG-TERM DEBT - (Continued) 

In November 1998, the Company entered into interest rate swap agreements
with two separate banks for the term notes and a mortgage note. The swaps range
from four to seven years forward at a fixed interest pay rate. The Company has
entered into these agreements to hedge changes in future interest rates on the
related debt levels.

During 1998, the Company entered into agreements with two banks to provide for
up to $35,000,000 of borrowings under revolving lines of credit for purchasing
or refinancing revenue equipment. The lines of credit are secured by first
priority, perfected security interests in the revenue equipment. The rate of
interest on the lines are either the bank's base rate (higher of the Federal
Funds rate plus 1/2 of 1% or the prime commercial lending rate of the bank) or a
rate based on the London Interbank Offered Rate (LIBOR). At December 31, 1998,
$24,200,000 was available under the comnbined equipment lines, as $1,000,000 was
outstanding under one line and $9,800,000 under the second line had been
converted to term loans.


7. INCOME TAXES

The components of the income tax provision are as follows (in thousands):

                                                   Year Ended December 31,
                                           ------------------------------------
                                             1998            1997          1996
                                           -------         -------         ----
     Current:
       Federal ....................        $ 1,766         $   767         $ --
       State and local ............             90             460          205
                                           -------         -------         ----
                                             1,856           1,227          205
     Deferred .....................          4,270             900          224
     Change in tax status .........             --           8,459           --
                                           -------         -------         ----
                                           $ 6,126         $10,586         $429
                                           =======         =======         ====

The provision for income taxes for the year ended December 31, 1997, consists of
federal and state income taxes subsequent to the Company's initial public
offering, certain state income taxes prior to the offering and a one-time tax
provision of $8,459,000 related to the recognition of the increase in the net
deferred tax liability recorded by the Company upon terminating its S
Corporation status. For the years ended December 31, 1996, the provision for
income taxes consisted of certain state and local income taxes.

The statement of income for the year ended December 31, 1997 includes a pro
forma adjustment for the income taxes which would have been recorded if the
Company had been a C Corporation for the entire period, based on tax laws in
effect during the respective period. The reconciliation of the federal statutory
income tax rate and the pro forma effective income tax rate is as follows for
the years ended December 31, 1998 and 1997, respectively:

                                                    Year Ended December 31,
                                                    -----------------------
                                                    1998               1997
                                                    ----               ----
     Federal statutory rate                         35.0%              35.0%
     State income taxes, net of federal benefit      2.8%               3.1%
     Other                                           1.9%               1.9%
                                                    ----               ----
                                                    39.7%              40.0%
                                                    ====               ====

The tax effect of temporary differences that give rise to deferred income taxes
are as follows (in thousands):

                                                     Year Ended December 31,
                                                   --------------------------
                                                      1998             1997
                                                   ---------         --------
     Insurance reserves                            $   1,385         $  1,442
     Allowance for bad debts                             446              590
     Other accruals and reserves                          25              130
     Property and equipment                          (15,641)         (11,782)
     Prepaid expenses                                   (404)            (300)
                                                   ----------        ---------
                                                   $ (14,189)        $ (9,920)
                                                   ==========        =========

                                      F-12
<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

8. EMPLOYEE BENEFIT PLANS

The Company maintains a defined contribution 401(k) profit-sharing plan for all
eligible employees. Employer contributions to the plan are based on matching
employee contributions and an annual discretionary contribution determined by
the shareholders. The Company's total contributions for the years ended December
31, 1998, 1997 and 1996, were $389,000, $650,000 and $551,000, respectively.

On January 1, 1998, the Company adopted an employee stock purchase plan under
the provisions of Section 423 of the Internal Revenue Code. The plan provides
eligible employees of the Company with an opportunity to purchase shares of the
Company's Common Stock at 85% of fair market value, as defined. The Company has
reserved 300,000 shares of Common Stock for issuance pursuant to this plan.
During 1998, 57,541 shares were issued under this plan.

9. STOCK OPTION PLANS

In 1994, the Company adopted the 1994 Stock Option Plan (the "Option Plan") that
permits the grant of options to purchase shares of the Company's Common Stock.
The Option Plan allows the granting of incentive and nonqualified stock options
to employees, directors and consultants at exercise prices not less than the
fair market value of the Company's Common Stock on the date of grant. The option
grants and related vesting periods are determined by the Board of Directors.

In December 1994, the Company granted options to purchase 685,820 shares of
Common Stock to key employees, under the Option Plan, at an exercise price of
$8.49 per share, representing fair market value on the grant date, as determined
by the Board of Directors. The options originally vested in December 2004. In
connection with the Company's initial public offering, the vesting was
accelerated to a five-year period commencing on October 7, 1997. No additional
options were granted under this plan, 137,164 options were canceled in 1998 and
no options were exercised. As of December 31, 1998, 109,728 options were
exercisable and no additional shares were available for future grant under the
Option Plan.

In 1997, the Company adopted the 1997 Incentive Plan (the "Incentive Plan") that
permits the grant of options to purchase a total of 1,500,000 shares of the
Company's Common Stock. The Incentive Plan allows the granting of incentive and
nonqualified stock options to employees, directors and consultants at terms
determined by the Board of Directors. Concurrent with the Company's initial
public offering, the Company granted options to purchase 735,300 shares of
Common Stock at $15 per share. These options vest ratably over a 5-year period.
During 1998, the Board of Directors authorized the repricing of 560,000 options
outstanding under the 1997 Incentive Plan. This amount represented all options
outstanding , except for those granted to the Company's executive officers and
outside directors. The options were reissued at a price of $6.88 per share. In
addition, 110,000 options were granted during 1998. At December 31, 1998, 1,700
options were exercisable and an additional 708,300 options were available for
future grant under the Incentive Plan.

Information related to all of the Company's stock option plans is as follows:

<TABLE>
<CAPTION>

                                                                          Weighted Average
                                                      Exercise Price       Exercise Price        Aggregate
                                     Options            Per Share             Per Share          Proceeds
                                    -----------------------------------------------------------------------
<S>                                 <C>                <C>                    <C>              <C>
Balance as of December 31, 1996       685,820            $ 8.49                $ 8.49           $ 5,822,612
   Granted                            735,300             15.00                 15.00            11,029,500
   Terminated                          (1,500)            15.00                 15.00               (22,500)
                                    -----------------------------------------------------------------------
Balance as of December 31, 1997     1,419,620          8.49 - 15.00             11.86            16,829,612
   Granted                            670,000              6.88                  6.88             4,606,250
   Terminated                        (749,264)         8.49 - 15.00             13.80           (10,339,843)
                                    -----------------------------------------------------------------------
Balance as of December 31, 1998     1,340,356         $6.88 - 15.00            $ 8.27           $11,096,019
                                    =========         =============            ======           ===========
</TABLE>


                                      F-13

<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

9. STOCK OPTION PLANS -(Continued)

The Company applies Accounting Principles Board Opinion No. 25, "Accounting For
Stock Issued to Employees," and the related interpretations in accounting for
its stock options plans. Had compensation cost for the Company's stock option
plans been determined based upon the fair value of the options at the date of
grant, as prescribed under SFAS No. 123, the Company's net income and basic and
diluted net income per share would have been reduced to the following pro forma
amounts:

                                                 Year Ended December 31,
                                           ------------------------------------
                                            1998            1997          1996
                                           ------          ------        ------
                                           (in thousands, except per share data)
                                           
     Net income:                           
        As reported                        $9,321          $2,418        $6,195
        Pro forma                           8,741           2,228         6,195
                                                                     
     Basic net income per share:                                     
        As reported                          0.87            0.31          0.90
        Pro forma                            0.82            0.29          0.90
                                                                     
     Diluted net income per share:                                   
         As reported                         0.86            0.30          0.88
         Pro forma                           0.81            0.28          0.88
                                                                      
The weighted average fair value of each stock option granted during the years
ended December 31, 1998 and 1997 was $3.46 and $7.94, respectively.

The fair value of each option grant is estimated on the date of the grant using
the Black-Scholes option pricing model with the following assumptions:

                                                   Year Ended December 31,
                                                  ------------------------
                                                    1998             1997
                                                  -------          -------
Risk -free interest rate                            4.722%           6.015%
Expected dividend yield                                --               --
Expected life                                     7 years          7 years
Expected volatility                                    40%              40%


The pro forma amounts are not representative of the pro forma effect in future
years because pro forma compensation expense does not consider future grants.

10. RELATED-PARTY TRANSACTIONS

The Company leased two facilities from its shareholders (see Note 11). In
November 1997, the Company purchased one of these facilities in consideration of
assuming the related mortgage loan. The shareholders' historical carrying value
of the facility was $1,323,000, the mortgage loan was $1,978,000 and a deferred
tax asset of $249,000 was transferred to the Company. The difference of $406,000
was recorded as a dividend.

The Company periodically made distributions to its shareholders to fund their
estimated personal tax liabilities. Due to overpayments in 1995 of approximately
$750,000, such amount was repaid by the shareholders in 1996. In 1997, the
Company loaned $438,000 to two trusts controlled by the Company's principal
shareholders in exchange for 5.83% notes. The notes were collateralized by the
Company Common Stock held by the trusts, and are included in prepaid expenses
and other in the accompanying consolidated balance sheets as of December 31,
1997. The notes were repaid in February 1998, along with accrued interest of
$22,600.

                                      F-14
<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

10. RELATED-PARTY TRANSACTIONS - (Continued)

In February 1996, Jevic Transportation Services, Inc. ("JTS"), a freight
brokerage company owned by the Company's principal shareholders, began
operations. JTS was merged into the Company effective December 31, 1997. For the
years ended December 31, 1997 and 1996, the Company recorded sales of $383,000
and $218,000, respectively, to JTS and incurred purchased transportation
expenses of $483,000 and $47,000, respectively, with JTS. JTS had gross revenues
of approximately $2,800,000 and $1,200,000 and net (loss) income of
approximately $(35,000) and $34,000 for the years ended December 31, 1997 and
1996, respectively. The principal shareholders received $125,000 from the
Company in exchange for their JTS stock in the merger, which was equal to their
capital investment in JTS, and equivalent to both the fair value and carrying
value of JTS. The merger was accounted for as a combination of companies under
common control. However, the consolidated statements of income have not been
restated as the impact would not be material.

11. COMMITMENTS AND CONTINGENCIES

The Company leases office space, maintenance facilities and certain revenue
equipment under capital and operating leases expiring on various dates through
2013. The Company also leases an operating facility from its shareholders (see
Note 10). The lease payment on this facility is $9,520 per month through
December 2013.

At December 31, 1998, the Company is liable under terms of noncancelable leases
for the following future minimum lease commitments:

                               RELATED      OPERATING
                                PARTY         OTHER           TOTAL
                               -------      ---------        ------
                                         (in thousands)
       1999                     $ 114         $2,237         $2,351
       2000                       114          1,472          1,586
       2001                       114            933          1,047
       2002                       114            933          1,047
       2003                       114            254            368
       Thereafter               1,142             --          1,142
                               ------         ------         ------
                               $1,712         $5,829         $7,541
                               ======         ======         ======

Rent expense for all operating leases was approximately $4,000,000, $4,200,000
and $5,234,000, for the years ended December 31, 1998, 1997 and 1996,
respectively, of which approximately $114,000, $310,000 and $376,000,
respectively, was on related-party leases.

The Company's risk retention amounts per occurrence are as follows:

Workers' compensation..............................................    $250,000
Liability - bodily injury and property damage......................      20,000
Employee medical and hospitalization...............................      75,000
Cargo loss and damage..............................................       5,000
Collision..........................................................      25,000

The Company has excess primary coverage on a per-claim and aggregate basis
beyond the deductible levels and also maintains umbrella policies to supplement
the primary liability coverage.

The liabilities for self-insured retention are included in claims and insurance
reserves based on claims incurred, with liabilities for unsettled claims and
claims incurred but not yet reported being estimated based on management's
evaluation of the nature and severity of individual claims and the Company's
past claims experience. Actual results may vary from management's estimates.

The Company's outstanding letters of credit at December 31, 1998 totaled
$1,025,000 to cover workers' compensation insurance claims.

The Company is involved in certain legal actions arising in the ordinary course
of business. Management believes that the outcome of such actions will not have
a material adverse effect on the Company's financial position or results of
operations.

                                      F-15
<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

11. COMMITMENTS AND CONTINGENCIES -(Continued)

From time to time the Company enters into agreements with fuel suppliers to
purchase a portion of its estimated fuel requirements at fixed prices. The
Company is a party to agreements with three fuel suppliers to purchase
approximately 35% of its estimated fuel needs through April 2000 at fixed
prices. Although these arrangements help reduce the Company's vulnerability to
rapid increases in the price of fuel, the Company will not benefit from fuel
price decreases to the extent of its commitments to purchase fuel under these
contracts.

12. RECAPITALIZATION AND RECLASSIFICATION

In connection with the initial public offering, on August 12, 1997, the
Company's Certificate of Incorporation was amended to reclassify the Common
Stock into two series: Class A Common Stock, no par value, 300 shares
authorized, and Common Stock, no par value, 1,200 shares authorized. In
addition, all outstanding shares were reclassified as Class A Common Stock.
Holders of the Class A Common Stock are entitled to two votes per share and
holders of Common Stock are entitled to one vote per share. Each share of Class
A Common Stock is convertible into one share of Common Stock.

On October 6, 1997, the Company's Certificate of Incorporation was amended to,
among other things, authorize 10,000,000 shares of no par value Preferred Stock,
10,000,000 shares of no par value Class A Common Stock and 40,000,000 shares of
no par value Common Stock, and to effect a 34,291-for-one split of the Common
Stock and Class A Common Stock. The reclassification, increases in authorized
shares and stock split have been retroactively reflected in the accompanying
consolidated financial statements.

                                      F-16
<PAGE>


                   JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)

Allowance for Doubtful Accounts

<TABLE>
<CAPTION>

                                                Beginning                                   Ending
                                                 Balance      Provisions    Deductions      Balance
                                                ---------     ----------    ----------      -------
<S>                                              <C>             <C>          <C>           <C>   
       Balance, December 31, 1998............    $1,527          $127         $(549)        $1,105

       Balance, December 31, 1997............       999           937          (409)         1,527

       Balance, December 31, 1996............       814           629          (444)           999
</TABLE>

                                      F-17
<PAGE>


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the incorporation of our
reports included in this Form 10-K, into the Company's previously filed
Registration Statement file number 333-44207.


                                            ARTHUR ANDERSEN LLP

Philadelphia, Pa.
   March 30, 1999