OTR EXPRESS, INC.
1996 ANNUAL REPORT
(Pictured on cover OTR tractor omitted)
<PAGE>
OTR uses technology and its proprietary 
Freight Optimization System to profitably acquire and haul
freight in the full truckload industry.

OTR maximizes freight oportunities from a large base of
more than 1,000 customers, geographically dispersed
throughout the United States.

OTR implemented a marketing program in 1996 to provide total
transportation solutions to larger shippers.  We now offer
QualComm satellite communications on every truck, electronic
data interchange (EDI) for load status information and 53-
foot air-ride trailers for premium capacity and safety.

In 1996, OTR began marketing its services to larger national
accounts capable of offering increased load counts at higher
rates.

OTR's unique operating strategy and its technological
leadership have enabled it to grow revenues at an annual
compound growth rate of 27% over 
the past five years.

Table of Contents
Highlights                                  1
Report to Stockholders                      3
Technology, Customer Service and Marketing  6
Driver Incentive Management System          8
Financial Review                            9
Financial Statements                       13
Directors and Officers                     25
Quarterly Financial Data                   26
Stockholder Information                    28 
<PAGE>
(Graphs-five year histories of various operating statistics omitted) 
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
(In thousands except per share data)   
                                 1996    1995     1994      1993    1992
<S>                             <C>     <C>      <C>       <C>     <C>
                            
Income Statement Data                                                           

Operating revenue                $55,261  $49,211 $42,760   $30,646 $21,993   
Operating income                   2,195    2,029   3,648     2,452   1,780   
Net income (loss)                   (368)    (157)  1,278       744     546   
                                 
Outstanding shares                 1,836    1,830   1,825     1,817   1,725   
Earnings (loss) per
share                            $ (0.20) $ (0.09)$  0.70   $  0.41 $  0.32  

                                 
Operating ratio (1)                 96.0%    95.9%   91.5%     92.0%  91.9%
                                 
                                 
Balance Sheet Data                                 
                                 
Current assets                   $ 7,681  $ 6,799 $ 6,109   $ 4,413 $ 2,990  

Current liabilities               19,152   17,187  10,781     7,402   4,420   
Total assets                      50,576   48,883  36,720    28,508  22,291  

Short-term debt                   15,751   13,968   7,913     5,606   3,340   
Long-term debt, less 
    current portion               21,019   20,844  14,595    11,995  10,090   
Stockholders' equity               8,805    9,156   9,301     7,973   7,207   
                                 
(1) Operating expenses as a percentage of operating revenue

Operational Highlights
                                   1996    1995    1994     1993    1992   
                                 
Total miles (in thousands)         52,330  47,197  40,279   30,644  22,195   
Average number of tractors            506     450     345      262     189   
Revenue per loaded mile           $ 1.042 $ 1.031 $ 1.041  $ 1.013 $ 0.997  

Revenue per mile                  $ 0.973 $ 0.963 $ 0.983  $ 0.957 $ 0.936  

                                 
Miles per week per truck            1,984   2,015   2,247    2,249   2,247   
Empty miles percentage                6.6%    6.6%    5.6%     5.6%    6.1%
Miles per load                      1,464   1,506   1,576    1,552   1,460   
                                 
Licensed tractors - end of
period                                503     503     394      301     228   
Licensed trailers - end of
period                                608     567     449      329     244   
Average equipment age (in
years)                                 
          Tractors - end of
          period                     1.82    1.23    1.50     1.34    1.12   
          Trailers - end of
          period                     1.88    3.05    2.92     2.81    2.60   
                                 
Fuel purchases at wholesale
(% of total )                        32.1%   31.9%   36.4%    32.3%   28.2%
Blended average fuel cost
per gallon                         $ 1.17  $ 1.07  $ 1.04   $ 1.04  $ 1.06
<PAGE>
</TABLE>
To Our Stockholders:

   
The trucking industry was very challenging again in
1996, which included the second consecutive year of weak
freight demand, high fuel prices and a shortage of qualified
drivers.  The end result was a disappointing loss of $0.20
per share accompanied by a decline in the stock price and
market capitalization.

The adversity faced by the company in the past two
years has encouraged us to continue to modify our marketing
approach to a changing industry.  We began with a goal of
increasing our percentage of shipper freight with a
corresponding reduction in less profitable broker freight. 
Today we have a new focus on marketing, customer service and
national account development.

During 1996, OTR implemented major programs, all of
which are significant changes designed to provide total
transportation solutions to expand our customer base.  These
included on-board satellite communications; electronic data
interchange (EDI) with our customers, guaranteed equipment
and rates for customer contracts; conversion of the trailer
fleet from 48 foot to 53 foot air-ride; additional drop-
trailers for customers; and expanded brokerage services to
cover logistics packages.

Our marketing department is now three times its former
size and 400 new shippers generating 6,000 loads were added
in 1996 .  We are targeting larger national accounts to
complement our freight optimization system, which maximizes
the profitability of freight acquired on the spot market.

Our 1996 shipper statistics reflect the success of our
new marketing effort.  Shipper freight increased from 52% to
66% of total miles, reducing broker freight from 48% to 34%. 
Revenue increased by $6.0 million or 12% from 1995 in the
midst of a weak market.  We accomplished these results with
an emphasis on technological excellence and on-time
reliability for our customers.

We believe we have made the correct decisions in 1996
with our investment in customer service and marketing.  The
company is now in a position to compete for freight on any
level.  The future for OTR and the truckload industry
depends on technology, reliability and customer service.
(Picture of Executive Officers omitted)
<PAGE>
1996 Results

Revenues increased by 12% to $55.2 million in 1996
from $49.1 million in 1995.  Operating income improved 8% to
$2.2 million from $2.0 million.  The company reported a net
loss for the year of $368,000 or $0.20 per share compared to
a loss of $157,000 or $0.09 per share in 1995.

The revenue increase was primarily related to a 12%
increase in the fleet size in 1996.  Although the economy
continued to grow in 1996, freight demand was weak
throughout the year as a result of an over-capacity of
trucks nation-wide.  At 1,984 miles per unit per week,
utilization was comparable with 1995.

Fuel costs were expected to trend downward during
1996.  Forecasted increases in exports from Iraq and lower
crude oil costs never developed.  Inventories declined to
minimum levels while refineries waited in vain for a decline
in crude oil prices to build up diesel stocks for the
winter.

As a result, diesel fuel prices trended higher
throughout the year, peaking at an average of $1.28 per
gallon in the fourth quarter.  For the year, higher fuel
costs (net of recovery from fuel surcharges and fuel
hedging) reduced earnings by $0.20 per share.

Wages and benefits as a percentage of revenue
stabilized during 1996.  OTR continues to pay premium wages
to attract experienced drivers.  The average compensation
for a driver with OTR for all of 1996 was $39,400.  Staffing
the trucks with the quality of driver we demand continues to
be a challenge in the face of a national driver shortage. 
Our unmanned truck percentage was 6.0% in 1996 compared to
4.6% in 1995 and a target of 3.5%.  Our demographics
remained strong with a fleet average of 17 years over-the-
road driving experience.

1997

It appears that 1997 will see a continuation of the
dramatic changes that are reshaping the truckload segment of
our industry.  We have already altered the direction and
strategy at OTR to capitalize on these changes.

We expect over-capacity in the truckload market to be
reduced in 1997, improving the demand for freight services. 
Only those carriers providing shippers with increasingly
reliable service and sophisticated technology will benefit
from the improvement, however.  We will strive to be a
leader in providing advanced technology as well as high
quality freight services to our customers.
(Picture of OTR tractor omitted)
<PAGE>
In August 1996, we completed the installation of on-
board satellite communications in all our trucks.  We now
have continuous communication with our drivers and the
current location of any truck through satellite positioning. 
This capability is required by many larger shippers who use
EDI for inventory control purposes.

Expansion plans for 1997 will add 50 units to the
fleet, bringing the total to 553 units.  The expansion is
contingent on strong freight demand and fleet staffing
experience during the year.

We are proud of the creativity and hard work of our
people in management information systems (MIS) and the
strides they have made in the past two years.  They have
successfully integrated our on-board satellite messaging
system with our load order system and developed new EDI
solutions for five of our larger shippers in 1996.

Our local area network now links all of our 130 computers, using
internally developed software that can be modified
continuously to 
meet our changing requirements.  We have made excellent
progress in positioning ourselves as a company that can
provide technological solutions for customer service
requirements.

Technology and customer focus will determine
the success of truckload carriers in the future.  These
areas will receive the highest priority in the years ahead. 
We expect 1997 to be a year in which our efforts to adapt to
industry changes will allow us to achieve a position of
leadership in the industry.  Our size will allow us to be
flexible and innovative in an increasingly sophisticated and
competitive market.

All associates of OTR Express remain committed to
achieve our mission statement of becoming the most efficient
provider of high quality truckload service in America.  We
want to thank our investors for their continuing interest
and confidence.  We will strive to provide you an
interesting and profitable investment as a result of your
ownership in our company.

Very truly yours,


/S/ William P. Ward
William P. Ward
President and Chairman
(Picture of Vice Presidents omitted)
<PAGE>
OTR Technology

OTR has utilized its leading edge technological capabilities
to be an industry leader in customer service and on time
reliability.  Our historical on-time delivery percentage is
in excess of 96%.


In 1996, we made several investments in technology that will
enable OTR to maintain its customer service leadership.  Our
new investments include:

o   Qualcomm Omnitracs System -  Each OTR truck is
equipped with a Qualcomm Omnitracs on-board satellite
communications system that provides on-demand, immediate
contact with any driver and global positioning reports for
equipment location, anywhere in the nation.  The company
receives hourly position reports on all of its trucks.  This
service is critical for customers with just-in-time
inventory management programs.

o   Electronic Data Interchange (EDI) - Using set
protocols, OTR provides daily or on-demand transfer of load
status information to our customers by computer.

o   Bar coding (October 1997) - Cartons will contain bar
coding information input by shippers.  This will enable
receivers to swipe the bar codes with a "wand" and obtain
the corresponding receiving information to input into their
inventory system.
   

Customer Service and Marketing

In the past eighteen months, OTR's marketing strategy
has adapted to changing market conditions, primarily as a
result of our goal to achieve higher levels of shipper
freight.  The company will continue to maximize the number
of customers and, therefore, freight opportunities for the
freight optimization system.  In addition, we are continuing
to market OTR to larger national accounts capable of
offering increased load counts at higher revenue rates.  

These larger shippers can be integrated into our existing
operating strategy effectively, providing a higher mix of
more profitable shipper freight.  

In addition to the advanced technology, we are offering
customers the following services:

o   Guaranteed equipment availability and rates, a
commitment to a higher level of customer service.

o   Total transportation solutions, including additional
drop trailers, expanded brokerage department to cover loads
and warehousing.

o   Fifty-three-foot trailers in order to market to a new
segment of shippers with requirements for higher cubic
capacity.  As of December 31, 1996, more than one-third of
our trailer fleet had been converted to the 53-foot format.

o   In late 1996, OTR established a new customer service
department dedicated to serving the freight needs of our
larger national account shippers.  The customer service
department provides those customers with a dedicated contact
within OTR who can respond to all customer needs.

OTR Services
OTR Services is our brokerage division, which includes
a base of more than 900 quality carriers who can provide
service beyond our own equipment availability.  OTR Services
enables OTR to meet all of a shippers needs in just one
phone call.  In 1996, OTR Services revenues increased by
more than 50% primarily due to the increase in OTR's
customer base.

OTR Efficiency

OTR continues to be one of the most efficient carriers in
the industry due  to our focus on technology and our
experienced drivers.  Our tractor-to-administrative staff
ratio, a measure of operating efficiency, is 5.59 to 1  in
an industry where 3.5 to 1 is considered very good.
<PAGE>
Freight Optimization System
OTR continues to utilize the Freight Optimization
System as the core of its dispatching and freight selection
process.  The OTR operating strategy places a premium on
management information and load planning systems.  The
Freight Optimization System utilizes the company's computer
network and a software system developed internally during
the past eight years.  This unique system allows OTR to
maximize rates and minimize empty miles.

The Freight Optimization System consists of the
following four continuous systems:

o   Rate Analysis - The company obtains the most current
market information on freight rates and destinations from
brokers.  This enables the company to ensure that OTR is
obtaining market rates on all freight.

o   Customer Priority Ranking - The system continually
analyzes our customers' freight history and develops a
customer priority ranking to direct our load planners to
call customers with the highest probability of giving OTR
the most profitable combinations of rates and destinations.

o   Fleet Replanning - The system replans the fleet every
three minutes, and provides the load planners with a time
sensitive listing of the trucks that need to be reloaded.

o   Equipment Dispersal Management - The dispersal
management system monitors the distribution of trucks across
the country to maximize freight opportunities and minimize
empty miles and downtime.  

The Freight Optimization System will continue to
locate the most profitable combination of moves, working in
conjunction with the new national accounts program.

On-time reliability
OTR continues to offer customers and potential
customers on-time reliability in a manner that few can
match:

o   Experienced drivers with an average of 47 years of age
and more than 15 years driving experience.

o   High-quality, low mileage, reliable equipment to
minimize downtime.

o   Superior service record- with a historical on-time
delivery percentage of greater than 96%.

OTR's approach also reduces the company's dependence
on any single customer.  The largest customer accounted for
only 3.8% of revenues in 1996, while the top five customers
combined for only 13.1% of revenues.

The dry van segment of the domestic truckload market
is estimated by trucking analysts at $24 billion.  The
largest three carriers in this market have captured
approximately 10% of the market on a combined basis.  OTR
revenues for 1996 were 0.2% of the total dry van market in
the U.S.
(Picture of OTR tractor omitted)
<PAGE>
Driver Incentive Management System

An article in the industry publication Transport
Topics  characterized driving for OTR as "A thinking man's
job."  Driver/managers are given a high level of
responsibility to manage the profitability of their
equipment.  OTR provides financial incentives to its
equipment managers to analyze each decision based on the
impact on net income.  This system results in higher
revenues and utilization with reduced fuel costs,
maintenance, accidents, insurance premiums and road
expenses.
Management has recognized from the start the
importance of quality, experienced equipment managers.  The
company is committed to paying managers a premium wage and
providing them with equipment they are proud to drive.  This
approach has produced a group of managers averaging 48 years
of age and 15 years of experience.
The company's Driver Incentive Management System 
rewards equipment managers with mileage pay, profit center
distributions and an ESOP based on the profitability of
their equipment.  All manager pay programs provide incentive
for managers to keep expenses low and equipment running efficiently.

Mileage pay at OTR is based on fuel efficiency achieved by a
manager.  Above-average fuel economy is rewarded with
premium pay per mile.  Managers have a large incentive to
run equipment at efficient speeds, reduce out of route
miles, idle less and maintain the equipment in peak
operating condition.

Profit Center Distributions

OTR maintains each truck as a separate profit center. 
Profit center reports include the actual revenues and
expenses of the equipment and fixed expense components for
administration, taxes and depreciation.  Managers earn 50%
of the net income of their profit center.

A typical monthly profit center statement for one of
our managers might look like the one shown below.  This
manager would receive 50% of $1,040 for the current quarter.

<TABLE>
OTR Express, Inc.       PROFIT CENTER STATEMENT
Report Period Ended        3/31/96     Manager:   JD7       Jeff Driver
Profit Center Start Date    1/1/96     Tractor:   1545
<CAPTION>
                              March    Percent     Quarter    Percent
<S>                          <C>      <C>         <C>        <C>
REVENUES
Mileage income                $10,866  100.0       $31,490    100.0
OPERATING EXPENSES
Wages                           3,002   27.6         8,483     26.9
Payroll taxes                     280    2.6           848      2.7
Fuel and fuel taxes             1,945   17.9         5,826     18.5
Tractor oil                        75    0.7           140      0.4
Tractor tires                     380    3.5           656      2.1
Tractor additives                  20    0.2            45      0.1
Tractor maintenance               278    2.6         1,016      3.2
Tractor wash                       25    0.2            73      0.2
Tractor parts                      42    0.4           185      0.6
Trailer expense (fixed)           500    4.6         1,500      4.8
Trailer maintenance (fixed)       185    1.7           555      1.8
Road expenses                     110    1.0           314      1.0
Insurance (fixed)                 400    3.7         1,200      3.8
Accidents and claims                0    0.0             0      0.0
Licensing and permits (fixed)     435    4.0         1,305      4.1
Management expenses
(% of revenue)                  1,195   11.0         3,464     11.0
Total                           8,872   81.7        25,610     81.3
OPERATING INCOME                1,994   18.3         5,880     18.7
Principal payment
(per mile)                      1,232   11.3         3,571     11.3
Interest payment (fixed)          423    3.9         1,269      4.0
NET CASH FLOW                  $  339    3.1       $ 1,040      3.3
<PAGE>
</TABLE>
<TABLE>
Selected Financial Data
<CAPTION>
(In thousands except per share data)
                               1996      1995      1994      1993      1992
<S>                           <C>       <C>       <C>       <C>       <C>     
INCOME STATEMENT                              
Operating revenue              $55,261   $49,211   $42,760   $30,646   $21,993
Operating expenses                              
    Salaries, wages and
    benefits                    22,395    19,837    15,912    10,779     7,570
    Purchased
    transportation               2,930     2,402     2,094       825       833
    Fuel                         7,011     5,511     4,546     3,777     2,883
    Maintenance                  3,310     3,005     2,648     1,896     1,323
    Depreciation                 6,723     6,517     5,243     4,276     2,896
    Insurance and
    claims                       1,639     1,594     1,738     1,624     1,060
    Taxes and
    licenses                     6,048     5,541     4,684     3,508     2,602
    Supplies and
    other                        3,010     2,775     2,247     1,509     1,046
        Total operating
        expenses                53,066    47,182    39,112    28,194    20,213
Operating income                 2,195     2,029     3,648     2,452     1,780
Interest expense                 2,789     2,283     1,449     1,143       913
Income (loss) before income
taxes                             (594)     (254)    2,199     1,309       867
Income tax expense (benefit)      (226)      (97)      921       497       321
Income (loss) before change
    in acct principle             (368)     (157)    1,278       812       546
Cumulative effect of change
    in acct principle                -         -         -       (68)        -
Net income (loss)              $  (368)  $  (157)  $ 1,278   $   744   $   546

Outstanding shares               1,836     1,830     1,825     1,817     1,725

Earnings (loss) per share      $ (0.20)  $ (0.09)  $  0.70   $  0.41   $  0.32

PERCENT OF REVENUE                                 
Operating revenue                100.0%    100.0%    100.0%    100.0%    100.0%
Operating expenses                                 
    Salaries, wages and
    benefits                      40.5      40.3      37.2      35.2      34.4 
    Purchased
    transportation                 5.3       4.9       4.9       2.7       3.8
    Fuel                          12.7      11.2      10.6      12.3      13.1
    Maintenance                    6.0       6.1       6.2       6.2       6.0
    Depreciation                  12.2      13.2      12.3      14.0      13.2
    Insurance and
    claims                         3.0       3.3       4.1       5.3       4.8
    Taxes and
    licenses                      10.9      11.3      11.0      11.4      11.8
    Supplies and
    other                          5.4       5.6       5.3       4.9       4.8
        Total operating
        expenses                  96.0      95.9      91.5      92.0      91.9
Operating income                   4.0       4.1       8.5       8.0       8.1
Interest expense                   5.1       4.6       3.4       3.7       4.2
Income (loss) before income
taxes                             (1.1)     (0.5)      5.1       4.3       3.9
Income tax expense (benefit)      (0.4)     (0.2)      2.1       1.7       1.5
Income (loss) before change
    in acct principle             (0.7)     (0.3)      3.0       2.6       2.4
Cumulative effect of change
    in acct principle                -         -         -      (0.2)        -
Net income (loss)                 (0.7)     (0.3)      3.0       2.4       2.4
</TABLE>
<PAGE>
Financial Review

1996 Compared to 1995

Operating Revenue.    Operating revenue increased by
12% to $55.3 million in 1996 from $49.2  million in 1995. 
The average number of tractors in service increased by 12%
from 450 to 506 for the year .  Revenue per loaded mile
increased by 1.0% to $1.042 from $1.031.  The company
continued to allocate additional resources to the brokerage
operation in 1996, resulting in a 25% increase in brokerage
revenue to $3.3 million in 1996 from $2.6 million in 1995. 
Management expects the brokerage division to expand in 1997
as a result of increased marketing efforts.

Operating Expenses.   The operating ratio (total
operating expenses as a percent of operating revenue)
increased to 96.0% in 1996 compared to 95.9% in 1995.

Salaries, wages and benefits increased to 40.5% of
revenue in 1996 compared to 40.3% in 1995.  The company
increased wage rates for drivers twice in 1995 to attract
and retain highly qualified and experienced drivers in a
very competitive market.  There were no increases in wage
rates for drivers in 1996.

Purchased transportation, which represents payments to
other trucklines for hauling loads contracted through the
company's brokerage division, was 5.3% of revenue compared
to 4.9% in 1995 because of the 25% increase in brokerage
revenue.  As a percentage of brokerage revenue, purchased
transportation was 90.1% in 1996 versus 92.5% in 1995.  

Fuel increased to 12.7% of revenue from 11.2% in 1995. 
The increase is primarily due to  an increase in the average
fuel cost per gallon ($1.17 in 1996 vs. $1.07 in 1995).  The
cost in 1996 is net of $220,000 of gain on fuel hedging
contracts which were in the money as a result of higher fuel
prices.


Depreciation as a percent of revenue was 12.2% in 1996
compared to 13.2% in 1995.  The increase is primarily a
result of an extended holding period for tractors.  In 1996,
the company began depreciating its tractors straight line
over 40 months to an estimated salvage value versus 36
months to an estimated salvage value in 1995.

Insurance and claims decreased to 3.0% of revenue in
1996 from 3.3% in 1995.  Effective January 1, 1996, the
company's liability insurance carrier reduced its premium
rate, reducing premiums by $115,000 in 1996.  In addition,
the company had a more favorable loss experience per mile in
1996. 

Supplies and other expenses decreased to 5.4% of
revenue from 5.6% in 1995.  In 1995, the company took a one-
time charge of $171,000 to write off the cost of a stock
offering which was withdrawn in June 1995 due to market
conditions. 

Interest Expense.  Interest expense increased to 5.1%
of revenue in 1996 from 4.6% in 1995 as a result of higher
debt levels.  In 1996, 81% of the company's capital was
interest bearing compared to 79% in 1995.

Net Income (Loss).  The net loss for 1996 was $368,000
or $0.20 per share compared to net loss of $157,000 or $0.09
per share in 1995.

1995 Compared to 1994

Operating Revenue.    Operating revenue increased by
15% to $49.2 million  in 1995 from $42.8 million in 1994. 
The average number of tractors in service increased by 30%
from 345 to 450 for the year .  Revenue per loaded mile
decreased by 1.0% to $1.031 from $1.041 primarily due to an
over capacity of trucks and weaker freight demand.  

Operating Expenses.   The operating ratio increased to
95.9% in 1995 compared to 91.5% in 1994.

Salaries, wages and benefits increased to 40.3% of
revenue in 1995 compared to 37.2% in 1994.  The company
<PAGE>
increased wage rates for drivers twice in 1995 to attract
and retain highly qualified and experienced drivers in a
very competitive market.  The increased wages, combined with
lower revenue rates per mile, caused the wages as a percent
of revenue to increase.

Fuel increased to 11.2% of revenue from 10.6% in 1994. 
The increase is primarily due to  an increase in the average
fuel cost per gallon ($1.07 in 1995 vs. $1.04 in 1994) and a
decrease in revenue per mile.  The fleet fuel economy
improved to 5.53 miles per gallon in 1995 from 5.50 in 1994.

Depreciation as a percent of revenue was 13.2% in 1995
compared to 12.3% in 1994.  The increase as a percent of
revenue in 1995 is a result of fixed expenses being spread
over lower revenue per unit in 1995.

Insurance and claims decreased to 3.3% of revenue in
1995 from 4.1% in 1994.  Effective January 1, 1995, the
company's liability insurance carrier reduced its premium
rate from 0.0135% of revenue to 0.0101%, reducing premiums
by $156,000 in 1995.  In addition, the company had a more
favorable loss experience per mile in 1995. 

Taxes and licenses as a percent of revenue increased
to 11.3% from 11.0% in 1994, primarily as a result of lower
revenue rates per mile in 1995.

Supplies and other expenses increased to 5.6% of
revenue from 5.3% in 1994, representing an increase in
advertising for new drivers and a one-time charge of
$171,000 to write off the cost of the withdrawn stock
offering.

Interest Expense.  Interest expense increased to 4.6%
of revenue in 1995 from 3.4% in 1994 as a result of lower
revenue per mile in 1995.  In addition, 79% of the company's
capital was interest bearing in 1995 compared to 71% in
1994.

Net Income (Loss).  The net loss for 1995 was $157,000
or $0.09 per share compared to net income of $1,278,000 or
$0.70 per share in 1994.

Seasonality

Seasonality causes variations in the operations of the
company as well as industry-wide operations.  Demand for the
company's service is generally the highest during the summer
and fall months.  Historically, expenses are greater during
the winter months when fuel costs are higher and fuel
efficiency is lower.

Inflation

The effect of inflation on the company has not been
significant during the last three years.  An extended period
of inflation could be expected to have an impact on the
company's earnings by causing interest rates, fuel and other
operating costs to increase.  Unless freight rates could be
increased on a timely basis, operating results could be
adversely affected.

Liquidity and Capital Resources

The growth of the company's business has required
significant investments in new revenue equipment acquired
primarily through secured borrowings.  Net capital
expenditures, principally for revenue equipment, were $11.9
million, $18.0 million and $7.6 million for the years ended
December 31, 1994, 1995 and 1996, respectively.  Included in
the 1996 figure is $1.6 million for on-board satellite
communications equipment.  The company plans to expand its
fleet by 50 tractors in 1997, conditioned upon improvement
in freight market conditions.  At February 28, 1997, the
company had conditional arrangements for 200 tractors (50
new units and 150 replacement units) at a cost of $16.0
million, as well as 190 new trailers (all replacement units)
at a cost of $3.9 million.  The company's capital
expenditures will be financed through internally generated
funds and secured borrowings.

Historically, the company has obtained loans for its
revenue equipment which are of shorter duration (three years
for trailers, four years for tractors) than the economic
useful lives of the equipment.  While such loans have
current maturities
<PAGE>
that tend to create working capital
deficits that could adversely affect cash flows, management
believes these factors are mitigated by the more attractive
interest rates and terms available on these shorter
maturities.  This financing practice has been a significant
cause of the working capital deficit which has existed since
the company's inception.  

The company intends to continue to obtain loans with
shorter maturities than the useful lives of its revenue
equipment.  However, beginning in 1997, the company will
finance tractors over forty months to reflect the longer
holding period.  Trailers will be financed over sixty
months.  This method of financing can be expected to
continue to produce working capital deficits in the future. 
The company's working capital deficit at December 31, 1996
was $11.5 million.  Primarily due to the company's equity
position and the potential for refinancing of both
unencumbered and encumbered assets, working capital deficits 
historically have not been a barrier to the company's
ability to borrow funds for operations and expansion.

The company has a credit line of $5.5 million with its
primary lending bank that bears interest at the prime
lending rate.  

Borrowings under this line were $1.4 million at December 31,
1996 and $1.5 million of the available credit line was
committed for letters of credit issued by the bank.  The
current line matures May 1, 1997 and is secured by accounts
receivable.  The company received commitments in December
1996 for up to $20 million of new revenue equipment
financing.  Of the anticipated new financing, 85% will be
fixed rate debt.  In the opinion of management, the company
has adequate liquidity for the foreseeable future based upon
funds expected to be generated from operations, the
company's equity position, the potential for refinancing of
assets owned by the company and the company's ability to
obtain secured equipment financing.

Other

   This annual report contains forward-looking statements
that are based on current expectations and are subject to
risks and uncertainties.  Actual results could differ
materially from current expectations due to a number of
factors, including general economic conditions, competitive
factors, pricing pressures and other risks described in the
company's SEC reports.
(Picture of OTR tractor omitted) 
<PAGE>



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS





To the Board of Directors and Stockholders of OTR Express,
Inc.:

We have audited the accompanying balance sheets of
OTR Express, Inc. (a Kansas corporation) as of December
31, 1996 and 1995, and the related statements of operations,
stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1996.  These
financial statements are the responsibility of the company's
management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that
we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures
in the financial statements.  An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial 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 OTR Express, Inc. as of December 31,
1996 and 1995, and the results of its operations and its
cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted
accounting principles.

   





                     /S/ Arthur Andersen LLP
                     ARTHUR ANDERSEN LLP



Kansas City, Missouri
February 4, 1997
<PAGE>
<TABLE>
Balance Sheets                        OTR Express, Inc.
<CAPTION>

At December 31                          1996                1995
<S>                                    <C>                 <C>            
ASSETS                  
CURRENT ASSETS                  
   Cash                                 $    43,107         $    36,101
   Accounts receivable, less
    allowance of $57,016 and $56,932      6,436,920           6,008,392
   Fuel inventory                           162,826             155,568
   Prepaid expenses and other             1,038,207             693,401
      TOTAL CURRENT ASSETS                7,681,060           6,893,462
                  
PROPERTY AND EQUIPMENT, at cost,
 less accumulated depreciation           42,894,525          41,989,346
                  
      TOTAL ASSETS                      $50,575,585         $48,882,808
                  
LIABILITIES AND STOCKHOLDERS' EQUITY                  
CURRENT LIABILITIES                  
   Bank note payable                    $ 1,389,000         $ 2,522,555
   Accounts payable, trade                1,396,760           1,113,192
   Accrued payroll and taxes                823,811           1,036,687
   Other accrued expenses                 1,180,900           1,068,992
   Current portion of long-term debt     14,361,651          11,445,508
      TOTAL CURRENT LIABILITIES          19,152,122          17,186,934
                  
LONG-TERM DEBT                           21,019,354          20,844,188
DEFERRED INCOME TAXES                     1,599,014           1,695,772
COMMITMENTS AND CONTINGENCIES (Note 9)                  
                  
STOCKHOLDERS' EQUITY                  
   Common stock, $.01 par value,
   5,000,000 shares authorized,
   1,842,209 and 1,835,209 issued            18,422              18,352
   Additional paid-in capital             6,540,124           6,515,694
   Retained earnings                      2,283,284           2,651,604
   Treasury stock, 6,690 and
   5,136 shares                             (36,735)            (29,736)
      TOTAL STOCKHOLDERS' EQUITY          8,805,095           9,155,914
                  
      TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY              $50,575,585         $48,882,808
                  
                  

The notes to financial statements are an integral part of
these statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Operations                  OTR Express, Inc.
<CAPTION>

For the Years Ended
 December 31                    1996           1995           1994
<S>                            <C>            <C>            <C>            
Operating revenue                     
   Freight revenue              $ 52,008,754   $ 46,615,804   $ 40,490,206
   Brokerage revenue               3,251,842      2,595,318      2,269,373
                     
   Total operating revenue        55,260,596     49,211,122     42,759,579
                     
Operating expenses                     
   Salaries, wages and
   benefits                       22,394,911     19,837,132     15,911,573
   Purchased transportation        2,930,271      2,401,605      2,093,512
   Fuel                            7,011,074      5,511,198      4,546,499
   Maintenance                     3,310,101      3,005,321      2,648,374
   Depreciation                    6,722,717      6,516,919      5,243,267
   Insurance and claims            1,639,039      1,593,642      1,737,593
   Taxes and licenses              6,047,748      5,541,240      4,683,752
   Supplies and other              3,010,050      2,774,623      2,247,089
                     
   Total operating expenses       53,065,911     47,181,680     39,111,659
                     
Operating income                   2,194,685      2,029,442      3,647,920
                     
Interest expense                   2,788,749      2,283,107      1,449,202
                     
Income (loss) before income
 taxes                             (594,064)      (253,665)      2,198,718
                     
Income tax expense
 (benefit)                         (225,744)       (96,393)        920,815
                     
Net income (loss)               $  (368,320)   $  (157,272)    $ 1,277,903
                     
Average common and common                     
   equivalent shares 
   outstanding                    1,835,650      1,830,246      1,825,118
                     
Net income (loss) per
   share                        $     (0.20)   $     (0.09)    $     0.70
                     
                     

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

</TABLE>
<PAGE>
<TABLE>
Statements of Stockholders'Equity                  OTR Express, Inc.
<CAPTION>

               Preferred  Common  Additional  Retained   Treasury Total     
               Stock      Stock   Paid-In     Earnings   Stock    Stockholders'
                                  Capital                         Equity
<S>           <C>        <C>     <C>         <C>        <C>      <C>
Balance,
 December 31,
 1993          $258       $17,954 $6,417,834  $1,546,476 $(9,680) $7,972,842
                     
Preferred
 stock
 converted to                     
 common stock  (258)          258          -           -       -           -
Allocation of
 common stock                     
 held by ESOP     -            70     66,430           -       -      66,500
Preferred
 stock
 dividends        -             -          -     (15,503)      -     (15,503)
Repurchase of
 common stock     -             -          -           -    (810)       (810)
Net income        -             -          -   1,277,903       -   1,277,903
                     
Balance,
 December 31,
 1994             -        18,282  6,484,264   2,808,876  (10,490) 9,300,932
                     
Allocation of
 common stock                     
 held by ESOP     -            70     31,430           -        -     31,500
Repurchase of
 common stock     -             -          -           -  (19,246)   (19,246)
Net loss          -             -          -    (157,272)       -   (157,272)
                     
Balance,
 December 31,
 1995             -        18,352  6,515,694   2,651,604  (29,736) 9,155,914
                     
Allocation of
 common stock                     
 held by ESOP     -            70     24,430           -        -     24,500
Repurchase of
 common stock     -             -          -           -   (6,999)    (6,999)
Net loss          -             -          -    (368,320)       -   (368,320)
                     
Balance,
 December 31,
 1996          $  -       $18,422 $6,540,124  $2,283,284 $(36,735)$8,805,095
                     
                     
                     

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


</TABLE>
<PAGE>
<TABLE>
Statements of  Cash Flows                  OTR Express, Inc.
<CAPTION>

For the Years Ended December 31     1996           1995           1994
<S>                                <C>            <C>            <C>         
OPERATING ACTIVITIES                        
Net income (loss)                   $  (368,320)   $  (157,272)   $ 1,277,903
Adjustments to reconcile
   net income (loss) to net                       
   cash provided by operating
   activities                     
   Depreciation                       6,722,717      6,516,919      5,243,267
   Deferred income taxes               (225,744)       (96,393)       920,815
   ESOP expenses and other               24,500         31,500         66,500
Changes in certain working
   capital items                        
   Accounts receivable                 (428,528)      (489,820)    (1,553,553)
   Other assets                        (223,078)      (145,111)      (140,068)
   Accounts payable and
   accrued expenses                     182,600         99,866      1,080,513
      Net cash provided by
      operating activities            5,684,147      5,759,689      6,895,377
                        
INVESTING ACTIVITIES                        
Acquisition of property and
   equipment                        (11,335,083)   (23,409,750)   (13,867,295)
Disposition of property and
   equipment                          3,707,187      5,380,077      1,951,000
Other                                         -              -        127,870
      Net cash used in investing
      activities                     (7,627,896)   (18,029,673)   (11,788,425)
                        
FINANCING ACTIVITIES                        
Proceeds from issuance of
 long term debt                      20,370,872     21,846,185     13,188,122
Repayments of long-term
 debt                               (17,279,563)   (11,331,461)    (8,558,763)
Net increase (decrease)
 in bank notes payable               (1,133,555)     1,790,000        277,125
Other                                    (6,999)       (19,246)       (16,313)
      Net cash provided by
      financing activities            1,950,755     12,285,478      4,890,171
                        
      Net increase (decrease)
      in cash                             7,006         15,494         (2,877)
      Cash, beginning of year            36,101         20,607         23,484
                        
      Cash, end of year             $    43,107   $     36,101    $    20,607
                        
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                       

                        
      Cash paid for interest        $ 2,794,254    $ 2,271,420    $ 1,445,708
                        
      Cash paid (refunded) for
      income taxes, net                (128,986)       250,637         16,693
                        
                        

The notes to financial statements are an integral part of
these statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

The company is a long-haul, dry van, truckload carrier
headquartered in Olathe, Kansas.  The company is a contract
carrier authorized by the Interstate Commerce Commission and
various state authorities to transport general commodities
through the continental United States.

Pervasiveness of Estimates

Management makes estimates and assumptions which affect the
amounts reported in the financial statements and footnotes. 
Actual results could differ from those estimates.

Revenue Recognition

Operating revenue is recognized upon receipt of freight. 
Related transportation expenses, including driver wages,
purchased transportation, fuel and fuel taxes, are accrued
when the revenue is recognized.  Management believes the
difference between the company's method of revenue
recognition, which is acceptable for generally accepted
accounting principles, and the proportional recognition
method, which is preferred, is not material to financial
position or the results of operations.

Cash Flows 

For the statements of cash flows, cash consists of cash on
hand and demand deposits with financial institutions.

Concentration of Credit

The company's primary market includes medium and large sized
full truckload shippers in the United States.  Loads
encompass all types of products for dry vans, excluding
perishables.  Credit is offered to all qualified customers. 
There are no predominant customers.

Fuel Hedging

The company purchases six month call options on No. 2
heating oil to manage exposure to fluctuations in diesel
fuel prices.  The options are carried at cost.  Gains and
losses are deferred and recognized as adjustments to fuel
expense when the underlying hedged transactions (fuel
purchases) occur.  At December 31, 1996, option fair values
totaled $127,000, deferred gains totaled $55,000 and
notional amounts totaled $2,794,000.

Property, Equipment and Depreciation

Property and equipment are stated at cost.  When equipment
is sold, the gain or loss indicated is recognized.  When
equipment is traded, the basis of the new equipment is
adjusted when necessary for any gain indicated.  The cost of
tires and tubes are capitalized as part of the tractors and
trailers at the time of acquisition and depreciated as a
component of the tractors and trailers.  Replacement tires
and tubes are charged to maintenance expense when installed.
<PAGE>
1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
(continued)

Depreciation of property and equipment is computed using
straight line methods and the following estimates useful
lives:

Assets                                          Estimated Useful Lives

Tractors                                        3.3 years
Trailers                                        10 years
Computer equipment, software      
  and other property                            5 - 12 years
Buildings and improvements                      31.5 - 40 years

The company depreciates tractors to estimated salvage
values, currently 48% to 51% of original cost.  The company
depreciates trailers to estimated salvage values, currently
21% to 28% of original cost.

Stock Issued to ESOP 

Stock issued to the Employee Stock Ownership Plan (ESOP) is
recorded at the estimated fair market value at the date of
issuance.  When stock held by the ESOP is allocated to
participants, employee benefits expense is charged for the
fair market value of the stock at the date of allocation.  

Insurance and Claims

Accrued expenses include reserves for the estimated cost of
claims for health, workers' compensation, personal injury,
property damage, and cargo loss not covered by insurance. 
Reserves are established by management based on the most
current information available regarding the accident or
claim.  Adjustments to previously established reserves, if
required, are included in operating results.  Management
does not believe future adjustments to these reserves, if
any, will have a significant impact on financial position or
results of operations.

Net Income (Loss) Per Share

Net income (loss) per share is calculated by dividing net
income (loss) by the weighted average number of shares of
common stock and common stock equivalents outstanding during
the period.  Common stock equivalents include the
outstanding convertible preferred stock which was converted
on December 30, 1994. 

Reclassification

Certain amounts in the 1995 financial statements have been
reclassified to conform with the presentation in the 1996
financial statements.

<PAGE>
2.  PROPERTY AND EQUIPMENT
<TABLE>
                                              1996          1995
Cost
<CAPTION>
<S>                                          <C>           <C>            
   Tractors                                   $39,261,365   $39,417,573
   Trailers                                    10,352,234     9,134,981
   Land                                           838,962       838,961
   Buildings and improvements                   2,879,459     1,573,485
   Computers and onboard
    communications equipment                    2,140,269       396,806
   Construction-in-progress                         5,014       554,165
   Other                                        1,076,794       969,838
   Total cost                                  56,554,097    52,885,809
Less accumulated depreciation                  13,659,572    10,896,463
   Net property and equipment                 $42,894,525   $41,989,346
</TABLE>
3.  BANK NOTE PAYABLE

Bank note payable consists of lines of credit collateralized
by accounts receivable.
   
The company has a $5,500,000 line of credit limited to
qualified accounts receivable, as defined, At December 31,
1996, $1,501,000 of the available line was allocated to
outstanding letters of credit.  The company has $2,029,000
available as of December 31, 1996.  Borrowings on the line
totaled $1,389,000 at December 31, 1996.  The line bears
interest at the prime rate (8.25% on December 31, 1996), and
expires May 1, 1997, at which time the principal balance
together with all accrued interest is payable.  The weighted
average interest rate on the line of credit for the years
ended December 31, 1996 and 1995 was 8.5% and 8.2%,
respectively. The annual average balance borrowed on the
line of credit for the years ended December 31, 1996 and
1995 was $1,242,000 and $1,368,000, respectively.


4.  LONG-TERM DEBT
<TABLE>
                                               1996             1995
<S>                                           <C>              <C>
Installment notes, 5.80% to 9.25%
payable in monthly installments
of principal and interest through
December 2001, collateralized            
by tractors, trailers and computer             
equipment                                      $33,824,958      $32,093,149
            
Installment notes, 7% to 8.75%,            
payable in monthly installments through            
January 2005, collateralized by
land                                             1,556,047          196,547
                                                35,381,005       32,289,696
   Less current portion                         14,361,651       11,445,508
   Long-term debt                              $21,019,354      $20,844,188

Maturities of long-term debt are as follows:            
                    1997                       $14,361,651
                    1998                        11,548,491
                    1999                         6,657,472
                    2000                         1,257,188
                    2001                         1,396,318
                    Thereafter                     159,885
                                               $35,381,005
</TABLE>
<PAGE>
5.  STOCKHOLDERS' EQUITY

The company's preferred stock (25,839 shares) was converted
to common stock on December 30, 1994  at the rate of one
share of preferred stock for one share of common stock. 
Warrants to purchase 50,000 shares of common stock at a
price of $6.00 per share expired unexercised on January 21,
1997.

6.  STOCK OPTION PLAN

The company has reserved 110,000 shares of its common stock
for issuance to key management personnel and directors of
the company under three stock option plans.  The plans
permit grants of nonqualified stock options.  The option
price cannot be lower than the fair market value of the
stock at the date of grant.  The options are exercisable
over a period not to exceed 10 years from the date of grant
(5 years for a more than 10% shareholder). 

The company applies Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees, in accounting
for its plan, and accordingly has not recognized
compensation costs in its financial statements for such
plans.  Had compensation costs been recognized in accordance
with Financial Accounting Standards Board Statement No. 123,
Accounting for Stock-Based Compensation, the company's
operating results would have been reported at the unaudited
pro forma amounts indicated below :


                                            1996            1995
Net loss:            
As reported                                $(368,320)       $(157,272)
Pro Forma                                  $(388,216)       $(191,017)
            
            
Loss per share:            
As reported                                $   (0.20)       $   (0.09)
Pro Forma                                  $   (0.21)       $   (0.10)
<PAGE>
6.  STOCK OPTION PLAN (continued)

The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model with
the following weighted average assumptions used for the 1996
and 1995 grants:

                                           1996             1995   
Dividend yield                             None             None   
Expected volatility                        36.3%            43.7%   
Risk-free interest rate                     6.2%             5.4%   
Expected option life                       3 Years          3 Years   





A summary of the company's stock option plans as of December
31, 1996 and changes during 1995 and 1996 is presented
below. There were no options outstanding at December 31,
1994.

         
                                                                Number of
                               Number of       Option price     shares
                               Shares          Per Share        Exercisable     

Granted during 1995 and
        outstanding at 
        December 31, 1995       50,000         $5.25 - $6.00    21,333
Granted during 1996             30,000         $4.94 - $5.00     5,000
                  
Outstanding at December 31,
        1996                    80,000                          26,333

                                               1996             1995
Fair value of options granted during the year  $32,091          $54,428
 Average remaining contract life               10 Years         9 Years


7.  EMPLOYEE STOCK OWNERSHIP PLAN

The company has a non-qualified ESOP which enables eligible
employees to acquire shares of the company's common stock. 
The cost of the ESOP is borne by the company.  In each of
the years 1996, 1995 and 1994, 7,000 shares of stock held by
the ESOP were allocated to participants, resulting in ESOP
expense of $24,500, $31,500 and $66,500 for the years ended
December 31, 1996, 1995 and 1994, respectively.  The Board
of Directors has approved additional allocations of 7,000
shares per year through 1997.  No provision has been made in
the financial statements for future contributions of stock
to the Plan or for allocation of additional shares to the
participants.
<PAGE>
8.  INCOME TAXES
Deferred income taxes reflect the impact of temporary
differences between assets and liabilities for financial
reporting purposes and such amounts as measured by tax laws
and regulations.  

Deferred tax assets and liabilities are comprised of the
following at December 31:

                                        1996              1995
Deferred tax assets               
   Claims and other reserves            $   378,341       $   309,698
   Net operating loss carryforward        2,023,708           185,986
   Other                                    182,655           286,403
                                          2,584,704           782,087
Deferred tax liabilities               
   Property and equipment                 3,983,038         2,269,890
   Revenue                                  200,680           207,969
                                          4,183,718         2,477,859
               
Net deferred tax liability              $ 1,599,014       $ 1,695,772

A reconciliation between the provision for income taxes and
the expected taxes using the federal statutory rate of 34%
follows:

                                    1996          1995         1994
                  
Tax expense (benefit) at federal
 statutory rate                     $(201,982)    $(86,246)    $747,564
State income tax expense
 (benefit)                            (23,762)     (10,147)      87,949
Other                                       -            -       85,302
     Income tax expense
      (benefit)                     $(225,744)    $(96,393)    $920,815

The provision for income taxes consists of the following:

                                    1996          1995         1994
Deferred tax expense (benefit)                  
     Federal                        $(201,981)    $(86,246)    $832,866
     State                            (23,763)     (10,147)      87,949
                                    $(225,744)    $(96,393)    $920,815


The company has available net operating loss carryforwards
of approximately $5,326,000 for regular income tax purposes
expiring through 2011.
<PAGE>
9.  COMMITMENTS AND CONTINGENCIES

Various legal actions, claims and assessments are pending
against the company.  It is the opinion of management that
these actions will have no significant impact on the
company's financial condition or its results of operations.

Under an agreement with its auto liability insurance
carrier, the company retains the first $100,000 of paid
losses for any single occurrence involving cargo, personal
injury or property damage.  Liability in excess of these
amounts is generally assumed by the carrier.  The agreement
with the carrier is collateralized by letters of credit
totaling $301,000 and deposits of $29,750.  Prior to January
1, 1995, the company retained the first $50,000 of paid
losses and a portion of loss adjusting expense up to $50,000
for any single occurrence.

The company is self-insured for workers' compensation
through a program with the State of Kansas.  All claims are
processed by a third party administrator and the company
will pay all losses and loss adjusting expense.  The company
carries an excess reinsurance policy that will limit the
company's losses to $250,000 per occurrence and $10,000,000
aggregate per year.
(Picture of OTR tractor omitted)
<PAGE>
Board of Directors                     Executive and Other Officers
   
William P. Ward                        William P. Ward
Chairman of the Board and              President and 
President                              Chief Executive Officer
OTR Express, Inc.
 
Gary J. Klusman                        Gary J. Klusman
Executive Vice President               Executive Vice President
OTR Express, Inc.

Janice Kathryn Ward                    Janice Kathryn Ward
Vice President Compensation and        Vice President Compensation and
Administration, Secretary              Administration, Secretary
OTR Express, Inc.

Dr. James P. Anthony                   Steven W. Ruben
Radiologist Vice                       President Finance and
Carondelet Radiology Group             Chief Financial Officer       

Frank J. Becker                        Christine D. Schowengerdt
President                              Treasurer
Becker Investments, Inc.

Terry G. Christenberry                 Carolyn J. Davidson
President                              Administrative Vice President and
Christenberry, Collet & Co., Inc.      Assistant Secretary

Charles M. Foudree                     Gary L. Hinkle
Executive Vice President - Finance     Vice President Fleet Management
Harmon Industries, Inc.

Dean W. Graves                         Susan K. Raymond
Owner, Dean Graves, FAIA               Vice President Dispatch Management
Architectural Firm

Dr. Ralph E. MacNaughton               Marc E. Hirschmann
Physician, Retired                     Vice President Maintenance & Purchasing
Carondelet Radiology Group

                                       Paul A. MacNaughton
                                       Vice President Management
                                       Information Systems


                                       Chip Seitz
                                       Vice President OTR Services


Photography by:                        Eric T. Janzen
Larry Andrew, Andrew Photography (p. 3)Vice President Marketing
Attig Photography Studio (p. 5)
and OTR Express Managers

<PAGE>
<TABLE>
QUARTERLY FINANCIAL DATA
<CAPTION> 
                                              1996                        
(In thousands except per share data)
                           Mar 31    Jun 30    Sep 30    Dec 31    Year
<S>                       <C>       <C>       <C>       <C>       <C>
Unaudited                              
INCOME STATEMENT                              
Operating revenue          $13,033   $13,406   $14,470   $14,352   $55,261
Operating expenses                              
    Salaries, wages and
    benefits                 5,404     5,256     5,828     5,907    22,395
    Purchased
    transportation             647       734       702       847     2,930   
    Fuel                     1,639     1,696     1,687     1,989     7,011
    Maintenance                804       793       835       878     3,310
    Depreciation             1,699     1,755     1,730     1,539     6,723
    Insurance and
    claims                     392       361       417       469     1,639
    Taxes and
    licenses                 1,523     1,441     1,554     1,530     6,048
    Supplies and
    other                      623       663       810       914     3,010
        Total operating
        expenses            12,731    12,699    13,563    14,073    53,066
Operating income               302       707       907       279     2,195
Interest expense               692       646       721       730     2,789
Income (loss) before
    income taxes              (390)       61       186      (451)     (594)
Income tax expense
    (benefit)                 (168)       25        82      (165)     (226)
Net income (loss)          $  (222)  $    36   $   104   $  (286)  $  (368)

Outstanding shares           1,836     1,836     1,836     1,836     1,836

Earnings (loss) per share  $ (0.12)  $  0.02   $  0.06   $ (0.16) $  (0.20)

PERCENT OF REVENUE                                 
Operating revenue            100.0%    100.0%    100.0%    100.0%    100.0%  
Operating expenses                                 
    Salaries, wages and
    benefits                  41.5      39.2      40.3      41.2      40.5   
    Purchased
    transportation             5.0       5.5       4.8       5.9       5.3   
    Fuel                      12.6      12.7      11.6      13.9      12.7   
    Maintenance                6.2       5.9       5.8       6.1       6.0   
    Depreciation              13.0      13.1      12.0      10.7      12.2   
    Insurance and
    claims                     3.0       2.7       2.9       3.3       3.0   
    Taxes and
    licenses                  11.7      10.7      10.7      10.7      10.9   
    Supplies and
    other                      4.7       4.9       5.6       6.3       5.4   
        Total operating
        expenses              97.7      94.7      93.7      98.1      96.0   
Operating income               2.3       5.3       6.3       1.9       4.0   
Interest expense               5.3       4.8       5.0       5.0       5.1   
Income (loss) before
    income taxes              (3.0)      0.5       1.3      (3.1)      (1.1)   
Income tax expense
    (benefit)                 (1.3)      0.2       0.6      (1.1)      (0.4)   
Net income (loss)             (1.7)      0.3       0.7      (2.0)      (0.7)   
</TABLE>
<PAGE>
<TABLE>
QUARTERLY FINANCIAL DATA
<CAPTION> 
                                                  1995                        
(In thousands except per share data)
                           Mar31    Jun 30     Sep 30    Dec 31    Year
<S>                       <C>      <C>        <C>       <C>       <C>
Unaudited                              
INCOME STATEMENT                              
Operating revenue          $11,595   $11,819   $12,581   $13,216   $49,211
Operating expenses                              
    Salaries, wages and
    benefits                 4,560     4,671     5,186     5,420    19,837
    Purchased
    transportation             701       586       558       557     2,402
    Fuel                     1,214     1,329     1,408     1,560     5,511
    Maintenance                720       778       791       716     3,005
    Depreciation             1,383     1,653     1,721     1,760     6,517
    Insurance and
    claims                     405       401       361       427     1,594
    Taxes and
    licenses                 1,269     1,301     1,425     1,546     5,541
    Supplies and
    other                      569       656       850       700     2,775
        Total operating
        expenses            10,821    11,375    12,300    12,686    47,182
Operating income               774       444       281       530     2,029
Interest expense               445       547       619       672     2,283
Income (loss) before
    income taxes               329      (103)     (338)     (142)     (254)
Income tax expense
    (benefit)                  130       (37)     (136)      (54)      (97)
Net income (loss)          $   199   $   (66) $   (202)  $   (88) $   (157)
Outstanding shares           1,831     1,830     1,830     1,830     1,830
Earnings (loss) per share  $  0.11   $ (0.04) $  (0.11)  $ (0.05) $  (0.09)

PERCENT OF REVENUE                                 
Operating revenue            100.0%    100.0%    100.0%     100.0%   100.0%
Operating expenses                                 
    Salaries, wages and
    benefits                  39.3      39.5      41.2       41.0      40.3   
    Purchased
    transportation             6.0       5.0       4.4        4.2       4.9   
    Fuel                      10.5      11.2      11.2       11.8      11.2   
    Maintenance                6.2       6.6       6.3        5.4       6.1   
    Depreciation              11.9      14.0      13.7       13.3      13.2   
    Insurance and
    claims                     3.5       3.4       2.9       3.2        3.3   
    Taxes and
    licenses                  11.0      11.0      11.3      11.7       11.3   
    Supplies and
    other                      4.9       5.6       6.8       5.3        5.6   
        Total operating
        expenses              93.3      96.2      97.8      96.0       95.9   
Operating income               6.7       3.8       2.2       4.0       4.1   
Interest expense               3.8       4.6       4.9       5.1       4.6   
Income (loss) before
    income taxes               2.8      (0.9)     (2.7)     (1.1)     (0.5)   
Income tax expense
    (benefit)                  1.1      (0.3)     (1.1)     (0.4)     (0.2)   
Net income (loss)              1.7      (0.6)     (1.6)     (0.7)     (0.3)
</TABLE>
<PAGE>
Stockholder Information

At March 1, 1997, there were 179 stockholders of
record.  Since many stockholders hold their certificates in
"street name," management estimates the number of individual
stockholders is approximately 1,000.


Price Range of Stock

   The company's common stock is traded on The Nasdaq
Stock Market/National Market System under the symbol OTRX. 
The following table sets forth for the periods indicated the
high and low sale prices of the common stock, as reported by
The Nasdaq Stock Market.


                                   1995
Period                                       Stock Price (Low-High)
Jan 1 to Mar 31, 1995                        $7.500  -  $10.250
Apr 1 to Jun 30, 1995                        $6.250  -  $9.250
Jul 1 to Sep 30, 1995                        $4.500  -  $7.500
Oct 1 to Dec 31, 1995                        $4.250  -  $5.500

                                1996-1997
Period                                       Stock Price (Low-High)
Jan 1 to Mar 31, 1996                        $4.250 - $5.000
Apr 1 to Jun 30, 1996                        $4.500 - $5.750
Jul 1 to Sep 30, 1996                        $4.875 - $5.875
Oct 1 to Dec 31, 1996                        $3.250 - $5.375 
Jan 1 to Feb 28, 1997                        $3.000 - $4.000

 To date, the company has not declared or paid any
dividends on its Common Stock and presently does not
anticipate paying any such dividends in the foreseeable
future.  It is management's present intention to retain
future earnings, if any, for use in its business.
<PAGE>
Stockholder Information
   
Corporate Offices                         Transfer Agent
OTR Express, Inc.                         UMB Bank of Kansas City, N.A.
804 N. Meadowbrook Drive                  Securities Tranfer Division
Olathe, Kansas  66062                     P.O. Box 410064
(913) 829-1616                            Kansas City, Missouri 64141-0064
 
Mailing address:  
     P.O. Box 2819                        Indepedendent Auditors
     Olathe, KS  66063-0819               Arthur Andersen LLP
                                          911 Main
                                          Suite 1500
                                          Kansas City, Missouri  64105

Annual Meeting                            General Counsel
The annual meeting of the stockholders    Bryan Cave LLP
will be at 7:00 p.m., Thursday,           7500 College Boulevard
May 1, 1997, at the Doubletree Hotel,     Suite 1100
10100 College Boulevard, Overland Park,   Overland Park, Ks.  66210
Kansas

Form 10-K                                 Common Stock Listing
Stockholders may receive a copy of        OTR Express, Inc. common stock 
the company's 1996 Annual Report to       is traded on the NASDAQ National
the Securities and Exchange Commission    Market System under the
on Form 10-K free of charge by writing    symbol: OTRX
to:
             Investor Relations
             804 N. Meadowbrook Dr.
             P.O. Box 2819
             Olathe, Kansas  66063
<PAGE>
OTR Express, Inc.
804 N. Meadowbrook Drive      Olathe, Kansas 66063-0819
1-913-829-1616   Fax 1-913-829-0622
(Back Cover picture of OTR tractor omitted)