##### 



SECOND QUARTER REPORT 2003

VITRAN

Accelerating Forward

Vitran Corporation is a North American provider of freight
services and distribution solutions to a wide variety of
companies and industries. Vitran offers less-than-truckload
(LTL) service throughout Canada and the United States utilizing
its own infrastructure and exclusive partners. Vitran
Logistics provides special distribution solutions that range
from inventory consolidation to responsibility for the complete
distribution function as well as highway and rail brokerage.
Vitran also provides premium same-day and next-day Truckload
(TL) services in the U.S. Midwest.

These services are provided by 2,700 employees and associates
located at more than 100 facilities and offices in the United
States and Canada. Vitran uses 5,600 pieces of equipment,
including tractors, trailers, and containers, operated by 1,500
drivers and independent contractors.

IN SUMMARY, WE PROVIDE THE FOLLOWING SERVICES

|  |  |                              
|- |  | -----------------------------
| |  | Less-than-truckload (LTL)    
| |  | Logistics
including Brokerage
| |  | Truckload
(TL)               





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##### 



REPORT TO SHAREHOLDERS

Management Discussion and Analysis

This report contains forward-looking
information with respect to Vitran
Corporation Inc.s (Vitran) operations
and future financial results. Actual
results may differ from expected results
for a variety of reasons including
factors discussed in the Companys
Management Discussion and Analysis
section of Vitrans 2002 Annual Report.

This interim Management Discussion and
Analysis (MD&A) should be read in
conjunction with the Companys June 30,
2003 second quarter financial statements
and the 2002 Annual MD&A document that
forms part of the Vitran 2002 Annual
Report.

Presidents Comment

Once again I am pleased to report another positive quarter for
Vitran. Earnings continue to exceed the prior year results,
marking the seventh consecutive quarterly improvement. The
LTL segment posted another strong quarter, surpassing prior
year results despite the negative impact of the dramatic
change in foreign exchange rates. The Logistics and Truckload
segments, although behind the prior year results, reported
positive earnings momentum compared to the first quarter of
2003.

Overview

The consolidated results for the three-month and six-month
periods ended June 30, 2003 reflect improved results for Vitran
compared to the prior year periods. Earnings per share basic
were $0.40 and $0.62 compared to earnings per share basic of
$0.30 and $0.39 for the three-month and six-month comparable
periods respectively. Strong performance from the LTL segment
and a reduction in the consolidated interest expense
contributed significantly to the rise in earnings per share.

Consistent with the first quarter of 2003, the current
quarters results include the impact of a significantly
stronger Canadian dollar versus the American dollar. Average
exchange rates were 1.38 and 1.44 for the 2003 three-month and
six-month periods versus 1.54 and 1.57 for the same periods a
year ago. Since over two thirds of Vitrans operations are
U.S. based, this had a significant negative impact on results
that are reported in Canadian dollars. The stronger Canadian
dollar also negatively impacted U.S. dollar denominated revenue
billed by Canadian subsidiaries, together with the related U.S.
dollar accounts receivable and cash.

Consolidated Results

Revenue for the three-month period ended June 30, 2003 was
$116.4 million, compared to $121.6 million for the same period
in 2002. For the quarter the consolidated revenue was reduced
by $9.0 million or 7.4% due to a stronger Canadian dollar.
Revenue for the six-month period was $231.8 million, compared
to $235.8 million for the same period a year ago. Consolidated
revenues for the six-month period were supported by the 1.9%
improvement in the LTL segment, offset by declines in the
Logistics and Truckload segments. Overall, the Companys
revenues for the six-month period were reduced by $13.4 million
or 5.7% due to a stronger Canadian dollar.





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##### 



REPORT TO SHAREHOLDERS

Gross profit for the three-month period decreased to $18.7
million compared to $20.9 million for the same quarter in
2002. For the six-month period gross profit declined to $34.1
million compared to $38.8 million in the same six-month period
in 2002. The stronger Canadian dollar had the effect of
reducing gross profit by $1.8 million and $2.4 million for the
three-month and six-month periods respectively. Increased
insurance expenses, healthcare and workers compensation costs
continue to burden the Companys gross margin. These cost
increases were however offset in the current quarter by
improved revenue yield.

Selling, general and administrative (SG&A) expenses for the
quarter were down $2.2 million to $11.1 million, or 9.6% of
revenue, compared to 11.0% of revenue in the same quarter of
2002. For the six-month period ended June 30, 2003, SG&A
expenses were $21.5 million compared to $26.6 million for the
same period in 2002. The 2002 six-month results include the
one-time special retirement bonus of $0.8 million for the
former President and Chief Executive Officer. The stronger
Canadian dollar contributed to a decline in S.G.&A. of $0.7
million and $0.8 million for the three- and six-month periods
respectively.

Income from operations before depreciation (EBITD) expense was
$7.5 million for the second quarter of 2003 compared to $7.6
million for the same quarter of 2002. The stronger Canadian
dollar had the effect of reducing EBITD by $1.1 million for the
current quarter compared to the 2002 second quarter.
Depreciation expense for the three-month period was $1.9 million
compared to $2.0 million for the same period a year ago.
Notwithstanding the negative impact of a stronger Canadian
dollar on the Companys income from operations, the consolidated
operating ratio for the second quarter improved to 95.2%
compared 95.4% for the prior year quarter. For the six-month
period ended June 30, 2003 the consolidated operating ratio was
96.2% compared to 96.6% for the same period in 2002.

Interest expense net of interest income for the second quarter
and six-month period ending June 30, 2003 was $0.5 million and
$1.2 million compared to $1.4 million and $2.8 million for the
same periods ending June 30, 2002. The decline is
attributable to a reduction in outstanding debt, and reduced
spreads on borrowings as a result of improved results. As
well, the Companys 8.95% fixed interest rate swap expired on
January 26, 2003 and was not renewed.

Improved profitability resulted in income taxes for the
quarter of $1.2 million compared to $1.1 million a year ago.
For the six-month period income taxes were $1.6 million
compared to $1.0 for the same period a year ago.

Net income for the second quarter of 2003 was $3.8 million or
$0.40 per share basic ($0.38 per share diluted), 33% higher
than the $0.30 per share basic and diluted posted in the same
quarter of 2002. For the six-month period ending June 30,
2003 net income was $5.9 million or $0.62 per share basic
($0.59 per share diluted) compared to $3.8 million or $0.39
per share basic and diluted for the period ended June 30,
2002. Per share basic results are based on 9,533,202 and
9,773,705 weighted average shares outstanding during the 2003
and 2002 six-month periods. Per share diluted results are
based on 9,934,518 and 9,773,705 weighted average shares
outstanding during the comparative six-month periods.

Segmented Results

Less-than-truckload (LTL)

The LTL segment reported revenue of $94.7 million versus $95.6 million for the





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REPORT TO SHAREHOLDERS

comparable three-month periods. Income from operations was
$5.9 million for the 2003 second quarter compared to $5.8
million for second quarter of 2002. Revenue and income from
operations for the quarter were both adversely affected by the
stronger Canadian dollar that accounted for a $10.5 million and
a $0.9 million decline respectively. For the six-month period
ended June 30, 2003 revenue was $189.0 million compared to
$185.5 million in the year ago six-month period. Income from
operations for the 2003 six-month period grew to $9.7 million
compared to $9.3 million in 2002. The stronger Canadian dollar
reduced revenue by $10.3 million and income from operations by
$0.9 million.

The Canadian LTL unit exceeded the prior year second quarter
results increasing revenue by 9.5%. This unit continues to
make impressive market share gains, including cross-border
revenue that grew by 24.6% over the prior year quarter. For
the quarter the Canadian LTL unit increased total shipments
6.9%, improved tonnage 6.6% and revenue per hundredweight,
excluding the impact of fuel surcharge, increased 1.0%.

Revenue at the U.S. LTL unit for the three-month period ended
June 30, 2003 increased 3.4%, measured in U.S. dollars,
compared to the same quarter in 2002. The unit continues to
focus on efficiency and consolidated redundant terminals,
including reconfiguring its terminal network to reduce linehaul
costs while maximizing service levels. For the second quarter
of 2003, compared to the same period of 2002, the US LTL unit
increased total shipments 2.4%, grew tonnage 0.3% and
improved revenue per hundredweight, excluding fuel surcharge,
by 1.3%.

Logistics

For the second quarter, revenue at the Logistics segment was
down 19.0% to $9.9 million compared to the 2002 second quarter.
The Freight Brokerage unit posted significant declines due to
the program that was implemented in the third quarter of 2002
to eliminate customers providing inadequate profitability.
Supply chain activity recorded a 7.2% increase in revenue,
reflecting increased occupancy at its new 80,000 square foot
distribution centre that was opened in the first quarter. A
new five-year, multi-million dollar agreement to seamlessly
manage the supply chain of a major Canadian shoe retailer is
scheduled to come on-line in the third quarter.

Truckload

Revenue for the Truckload segment, excluding the impact of
foreign exchange, was down 5.4% for the comparable quarters due
to a very competitive Midwestern U.S. operating environment.
As well, volume at a number of major customers is significantly
lower as they cope with a sub-standard economy. Income from
operations was down $0.3 million compared to the prior year
second quarter, but the segment posted its second quarterly
improvement surpassing the first quarters results by $0.2
million.

Liquidity and Capital Resources

Cash flow from operations for the six-month period before
non-cash working capital changes generated $9.5 million
compared to $7.9 million in the prior year period and $5.8
million for the quarter compared to a $5.0 million in the
prior year quarter. Non-cash working capital consumed $1.2
million in the current quarter versus a contribution of $1.9
million in the second quarter of 2002.

The assets and liabilities denominated in foreign currency of
self-sustaining foreign operations are translated in Canadian
dollars at exchange rates in effect





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##### 



REPORT TO SHAREHOLDERS

at the balance sheet date. The original investment and
subsequent earnings of these foreign operations are
translated into Canadian dollars at the rate of exchange on
the date of the transaction. The resulting translation gains
and losses are accumulated in a separate component of
shareholders equity, i.e. the Cumulative Translation
Adjustment Account. Certain of the Companys foreign currency
denominated debt act as a hedge to the foreign currency
exposure generated by the self-sustaining foreign operations.
As such, the translation gains or losses related to the debt
are also accumulated in the cumulative translation adjustment
account. As a result of the significant strengthening of the
Canadian dollar during 2003, this cumulative translation
adjustment account has moved from an unrealized loss of
$37,000 at December 31, 2002 to an unrealized loss of $8.3
million at June 30, 2003.

Interest bearing debt, net of cash on hand of $6.3 million,
decreased by 15.2% to $39.5 million at June 30, 2003 compared
to $46.6 million at December 31, 2002. Interest bearing debt,
net of cash on hand as a percentage of total capital, was
33.3% at the end of 2003 second quarter compared to 36.2% at
December 31, 2002. During the first half of 2003 the Company
repaid $4.9 million of long-term debt. The balance of the
reduction reflects the impact of the stronger Canadian dollar.

Capital expenditures for the second quarter amounted to $0.4
million compared to $3.3 million in the same period in 2002.
The Company primarily invested in trailing fleet and computer
equipment during the quarter. The Company repurchased Class A
voting shares under its normal course issuer bid of $0.5
million and $0.9 million during the quarter and six-month
period respectively. This represented 52,000 shares and
107,000 shares respectively.

Management expects that the existing working capital, together
with available revolving credit facilities, will be sufficient
to fund the operating capital and principal debt requirements
of the company.

Outlook

Although operating conditions remain very demanding, the
Company continues to exceed prior year results. The trend of
improving results will continue to depend on persistent focus
on cost controls and efficiency, as well as the added benefit
of a low interest rate environment.

/s/ Rick E. Gaetz
Rick E. Gaetz
President and
Chief Executive Officer

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Information in this news announcement relating to projected
growth, improvements in productivity and future results constitutes
forward-looking statements. Actual results in future periods may
differ materially from the forward-looking statements because of a
number of risks and uncertainties, including but not limited to
economic factors, demand for the Companys services, fuel price
fluctuations, the availability of employee drivers and independent
contractors, risks associated with geographic expansion, capital
requirements, claims exposure and insurance costs, competition and
environmental hazards. Additional information about these and other
factors that could affect the Companys business is set forth in
the Companys 2002 Annual Report on Form 20-F and other
filings with the Securities and Exchange Commission.





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##### 



CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
(In thousands of Canadian dollars except for per share amounts)

|                                                                |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |           | 
|--------------------------------------------------------------- | ----------------------------- | - | ------- | --------- | ------- | - | ------- | --------- | ------- | - | ------- | --------- |  | - | ------- | --------- | 
|                                                                |                               |   | Three   |           | Three   |   | Six     |           | Six    
|                                                                |                               |   | months  |           | months  |   | months  |           | months 
|                                                                |                               |   | ended   |           | ended   |   | ended   |           | ended  
|                                                                |                               |   | June 30 |           | June 30 |   | June 30 |           | June 30
|                                                                |                               |   | 2003    |           | 2002    |   | 2003    |           | 2002   
|                                                                |                               |   |         |           |         |   |         |           |        
|Revenue                                                         |                               | $ | 116,373 |           |         | $ | 121,576 |           |         | $ | 231,836 |           |  | $ | 235,822 |          
|Operating expenses                                              |                               |   | 97,715  |           |         |   | 100,636 |           |         |   | 197,711 |           |  |   | 196,998 |          
|                                                                |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |          
|Gross profit                                                    |                               |   | 18,658  |           |         |   | 20,940  |           |         |   | 34,125  |           |  |   | 38,824  |          
|Selling, general and administrative
expenses                    |                               |   | 11,139  |           |         |   | 13,338  |           |         |   | 21,480  |           |  |   | 26,551  |          
|                                                                |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |          
|Income from operations before
depreciation                      |                               |   | 7,519   |           |         |   | 7,602   |           |         |   | 12,645  |           |  |   | 12,273  |          
|Depreciation expense                                            |                               |   | 1,887   |           |         |   | 2,005   |           |         |   | 3,927   |           |  |   | 4,195   |          
|                                                                |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |          
|                                                                |                               |   | 5,632   |           |         |   | 5,597   |           |         |   | 8,718   |           |  |   | 8,078   |          
|Interest expense, net                                           |                               |   | (489    | )         |         |   | (1,418  | )         |         |   | (1,169  | )         |  |   | (2,848  | )        
|Loss on sale of fixed assets                                    |                               |   | (189    | )         |         |   | (135    | )         |         |   | (130    | )         |  |   | (424    | )        
|                                                                |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |          
|                                                                |                               |   | (678    | )         |         |   | (1,553  | )         |         |   | (1,299  | )         |  |   | (3,272  | )        
|Income from operations before
income taxes                      |                               |   | 4,954   |           |         |   | 4,044   |           |         |   | 7,419   |           |  |   | 4,806   |          
|Income taxes                                                    |                               |   | 1,186   |           |         |   | 1,136   |           |         |   | 1,555   |           |  |   | 1,005   |          
|                                                                |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |          
|Net income                                                      |                               | $ | 3,768   |           |         | $ | 2,908   |           |         | $ | 5,864   |           |  | $ | 3,801   |          
|                                                                |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |          
|Retained earnings, beginning of period                          |                               | $ | 46,371  |           |         | $ | 35,301  |           |         | $ | 44,528  |           |  | $ | 39,204  |          
|Cost of repurchase of Class A shares
in excess of book value    |                               |   | (251    | )         |         |   | (418    | )         |         |   | (504    | )         |  |   | (418    | )        
|Effect of adoption of new goodwill
accounting standard (note 2) |                               |   |        |           |         |   |        |           |         |   |        |           |  |   | (4,796  | )        
|                                                                |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |          
|Retained earnings, end of period                                |                               | $ | 49,888  |           |         | $ | 37,791  |           |         | $ | 49,888  |           |  | $ | 37,791  |          
|                                                                |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |          
|Income per share:                                               |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |          
|                                                                | Basic                         |   | $       | 0.40      |         |   | $       | 0.30      |         |   | $       | 0.62      |  |   | $       | 0.39      | 
|                                                                | Diluted                       |   | $       | 0.38      |         |   | $       | 0.30      |         |   | $       | 0.59      |  |   | $       | 0.39      | 
|Weighted average number of shares:                              |                               |   |         |           |         |   |         |           |         |   |         |           |  |   |         |          
|                                                                | Basic                         |   |         | 9,511,133 |         |   |         | 9,742,623 |         |   |         | 9,533,202 |  |   |         | 9,773,705 | 
|                                                                | Potential exercise of options |   |         | 399,761   |         |   |         |          |         |   |         | 401,316   |  |   |         |          | 
|                                                                | Diluted                       |   |         | 9,910,894 |         |   |         | 9,742,623 |         |   |         | 9,934,518 |  |   |         | 9,773,705 | 

See accompanying notes to consolidated financial statements





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CONSOLIDATED BALANCE SHEETS

(Unaudited)
(In thousands of Canadian dollars)

|                                     |                                          |   |               |        |               |   |         |        |  
|------------------------------------ | ---------------------------------------- | - | ------------- | ------ | ------------- | - | ------- | ------ | -
|                                     |                                          |   | As at        
|                                     |                                          |   |              
|                                     |                                          |   | June 30, 2003 |        | Dec. 31, 2002
|                                     |                                          |   |               |        |              
|Assets                               |                                          |   |               |        |               |   |         |       
|Current Assets:                      |                                          |   |               |        |               |   |         |       
|                                     | Cash                                     |   | $             | 6,282  |               |   | $       | 12,624 |  
|                                     | Accounts receivable                      |   |               | 49,488 |               |   |         | 46,748 |  
|                                     | Inventory, deposits and prepaid expenses |   |               | 6,927  |               |   |         | 9,774  |  
|                                     |                                          |   |               |        |               |   |         |       
|                                     |                                          |   | 62,697        |        |               |   | 69,146  |       
|Fixed assets                         |                                          |   | 43,176        |        |               |   | 48,570  |       
|Future income taxes                  |                                          |   | 642           |        |               |   | 236     |       
|Goodwill (note 2)                    |                                          |   | 60,170        |        |               |   | 69,208  |       
|                                     |                                          |   |               |        |               |   |         |       
|                                     |                                          | $ | 166,685       |        |               | $ | 187,160 |       
|                                     |                                          |   |               |        |               |   |         |       
|Liabilities and Shareholders Equity |                                          |   |               |        |               |   |         |       
|Current Liabilities:                 |                                          |   |               |        |               |   |         |       
|                                     | Accounts payable and accrued liabilities |   | $             | 38,831 |               |   | $       | 43,091 |  
|                                     | Income and other taxes payable           |   |               | 3,060  |               |   |         | 2,747  |  
|                                     | Current portion of long-term debt        |   |               | 14,908 |               |   |         | 11,052 |  
|                                     |                                          |   |               |        |               |   |         |       
|                                     |                                          |   | 56,799        |        |               |   | 56,890  |       
|Long-term debt                       |                                          |   | 30,854        |        |               |   | 48,124  |       
|Shareholders equity:                |                                          |   |               |        |               |   |         |       
|                                     | Capital stock                            |   |               | 37,460 |               |   |         | 37,655 |  
|                                     | Retained earnings                        |   |               | 49,888 |               |   |         | 44,528 |  
|                                     | Cumulative translation adjustment        |   |               | (8,316 | )             |   |         | (37    | )
|                                     |                                          |   |               |        |               |   |         |       
|                                     |                                          |   | 79,032        |        |               |   | 82,146  |       
|                                     |                                          |   |               |        |               |   |         |       
|                                     |                                          | $ | 166,685       |        |               | $ | 187,160 |       
|                                     |                                          |   |               |        |               |   |         |       

See accompanying notes to consolidated financial statements





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##### 



CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
(In thousands of Canadian dollars)

|                                               |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |         |       |  
|---------------------------------------------- | --------------------------------------------- | ----------------------------- | ------ | ------- | ----- | ------- | ------ | ------- | ----- | ------- | ------ | ------ | ----- | - | ------- | ------- | ----- | -
|                                               |                                               |                               |        | Three   |       | Three   |        | Six     |       | Six    
|                                               |                                               |                               |        | months  |       | months  |        | months  |       | months 
|                                               |                                               |                               |        | ended   |       | ended   |        | ended   |       | ended  
|                                               |                                               |                               |        | June 30 |       | June 30 |        | June 30 |       | June 30
|                                               |                                               |                               |        | 2003    |       | 2002    |        | 2003    |       | 2002   
|                                               |                                               |                               |        |         |       |         |        |         |       |        
|Cash provided by (used in):                    |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|Operations:                                    |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|                                               | Net income                                    |                               | $      | 3,768   |       |         | $      | 2,908   |       |         | $      | 5,864  |       |   | $       | 3,801   |      
|                                               | Items not involving cash from operations:     |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |         |      
|                                               |                                               | Depreciation and amortization |        |         | 1,887 |         |        |         | 2,005 |         |        |        | 3,927 |   |         |         | 4,195 |  
|                                               |                                               | Future income taxes           |        |         | (51   | )       |        |         | (73   | )       |        |        | (406  | ) |         |         | (538  | )
|                                               |                                               | Loss on sale of fixed assets  |        |         | 189   |         |        |         | 135   |         |        |        | 130   |   |         |         | 424   |  
|                                               |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|                                               |                                               |                               | 5,793  |         |       |         | 4,975  |         |       |         | 9,515  |        |       |   | 7,882   |        
|                                               | Change in non-cash working capital components |                               |        | (1,265  | )     |         |        | 1,909   |       |         |        | (3,840 | )     |   |         | 274     |      
|                                               |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|                                               |                                               |                               | 4,528  |         |       |         | 6,884  |         |       |         | 5,675  |        |       |   | 8,156   |        
|Investments:                                   |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|                                               | Purchase of fixed assets                      |                               |        | (428    | )     |         |        | (3,258  | )     |         |        | (2,346 | )     |   |         | (3,566  | )    
|                                               | Proceeds on sale of fixed assets              |                               |        | 168     |       |         |        | 121     |       |         |        | 421    |       |   |         | 698     |      
|                                               | Proceeds on sale of discontinued business     |                               |        |        |       |         |        |        |       |         |        |       |       |   |         | 2,685   |      
|                                               |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|                                               |                                               |                               | (260   | )       |       |         | (3,137 | )       |       |         | (1,925 | )      |       |   | (183    | )      
|Financing:                                     |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|                                               | Change in revolving credit facility           |                               |        |        |       |         |        | 186     |       |         |        |       |       |   |         | (1,846  | )    
|                                               | Repayment of long-term debt                   |                               |        | (3,250  | )     |         |        | (8,710  | )     |         |        | (4,921 | )     |   |         | (12,779 | )    
|                                               | Issue of Class A voting shares                |                               |        | 105     |       |         |        | 51      |       |         |        | 227    |       |   |         | 51      |      
|                                               | Repurchase of Class A voting shares           |                               |        | (460    | )     |         |        | (940    | )     |         |        | (926   | )     |   |         | (1,292  | )    
|                                               |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|                                               |                                               |                               | (3,605 | )       |       |         | (9,413 | )       |       |         | (5,620 | )      |       |   | (15,866 | )      
|Effect of translation adjustment on cash       |                                               |                               | (2,458 | )       |       |         | (1,419 | )       |       |         | (4,472 | )      |       |   | (1,504  | )      
|                                               |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|Decrease in cash position                      |                                               |                               | (1,795 | )       |       |         | (7,085 | )       |       |         | (6,342 | )      |       |   | (9,397  | )      
|Cash position, beginning of period             |                                               |                               | 8,077  |         |       |         | 10,567 |         |       |         | 12,624 |        |       |   | 12,879  |        
|                                               |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|Cash position, end of period                   |                                               | $                             | 6,282  |         |       | $       | 3,482  |         |       | $       | 6,282  |        |       | $ | 3,482   |        
|                                               |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|Change in non-cash working capital
components: |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|                                               | Accounts receivable                           |                               | $      | 2,448   |       |         | $      | (384    | )     |         | $      | (2,740 | )     |   | $       | (3,618  | )    
|                                               | Inventory, deposits and prepaid expenses      |                               |        | 1,665   |       |         |        | 1,275   |       |         |        | 2,847  |       |   |         | (136    | )    
|                                               | Income and other taxes recoverable/payable    |                               |        | 414     |       |         |        | 308     |       |         |        | 313    |       |   |         | (738    | )    
|                                               | Accounts payable and accrued liabilities      |                               |        | (5,792  | )     |         |        | 710     |       |         |        | (4,260 | )     |   |         | 4,766   |      
|                                               |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        
|                                               |                                               | $                             | (1,265 | )       |       | $       | 1,909  |         |       | $       | (3,840 | )      |       | $ | 274     |        
|                                               |                                               |                               |        |         |       |         |        |         |       |         |        |        |       |   |         |        

See accompanying notes to consolidated financial statements





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)
(In thousands of Canadian dollars except for per share amounts)

1     Accounting Polices

The interim consolidated financial statements have been
prepared in accordance with Canadian generally accepted
accounting principles and follow the same accounting
principles and methods of application as the most recent
annual consolidated financial statements. The interim
consolidated financial statements do not contain all the
disclosures required by Canadian generally accepted
accounting principles and should be read in conjunction
with the Companys annual consolidated financial statement
included in the 2002 Annual Report.

2     Goodwill

Goodwill represents the excess of acquisition cost over the
fair value of net assets of businesses acquired. Prior to
January 1, 2002, goodwill was amortized over 40 years on a
straight-line basis.

Effective January 1, 2002, the Corporation adopted the
Canadian Institute of Chartered Accountants (CICA) new
accounting standard for goodwill and other intangible
assets. The Corporation no longer amortizes goodwill but
annually compares the fair value of its reporting units to
the carrying value to determine if an impairment loss has
occurred.

As at June 30, 2002, the Corporation completed its initial
goodwill impairment test and concluded that an impairment
existed. As at September 30, 2002 the amount of charge was
quantified and recognized as a change in accounting policy
and charged to opening retained earnings as of January 1,
2002. Charges of $1.3 million and $3.5 million,
respectively, were recorded in the Freight Brokerage and
the Truckload reporting units to adjust the carrying value
of goodwill for each reporting unit to its implied fair
value. Such amount has been reflected as a direct charge
to retained earnings effective January 1, 2002 without
restatement of prior period figures.

3     Stock Option Plan

Under the Corporations stock option plan, options to
purchase Class A voting shares of the Corporation may be
granted to key employees, officers and directors of the
Corporation and its affiliates by the Board of Directors or
by the Corporations Compensation Committee. There are
1,240,300 options authorized under the plan. The term of
each option is 10 years and the vesting period is generally
five years. The exercise price for options is the trading
price of the Class A voting shares of the Corporation on
The Toronto Stock Exchange on the day of the grant.





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table outlines the impact if the compensation
cost for the Corporations stock options was determined under
the fair-value based method. The Corporation has applied the
pro forma disclosure provisions of the new standard to awards
granted on or after January 1, 2002. The pro forma effect of
awards granted prior to January 1, 2002 has not been included.

|                                   |  |         |       |         |  |         |       |         |         |   |       |  |  |   |       | 
|---------------------------------- |  | ------- | ----- | ------- |  | ------- | ----- | ------- | ------- | - | ----- |  |  | - | ----- | 
|                                   |  | Three   |       | Three   |  | Six     |       | Six    
|                                   |  | months  |       | months  |  | months  |       | months 
|                                   |  | ended   |       | ended   |  | ended   |       | ended  
|                                   |  | June 30 |       | June 30 |  | June 30 |       | June 30
|                                   |  | 2003    |       | 2002    |  | 2003    |       | 2002   
|                                   |  |         |       |         |  |         |       |        
|Options granted                    |  | nil     |       | nil     |  | nil     |       |         | 175,000 |  
|Net income, as reported            |  | $       | 3,768 |         |  | $       | 2,908 |         |         | $ | 5,864 |  |  | $ | 3,801 | 
|Pro forma net income               |  | $       | 3,755 |         |  | $       | 2,895 |         |         | $ | 5,838 |  |  | $ | 3,775 | 
|Pro forma basic income per share   |  | $       | 0.39  |         |  | $       | 0.30  |         |         | $ | 0.61  |  |  | $ | 0.39  | 
|Pro forma diluted income per share |  | $       | 0.38  |         |  | $       | 0.30  |         |         | $ | 0.59  |  |  | $ | 0.39  | 

4     Comparative Figures

Certain of the 2002 figures presented for comparative purposes
have been reclassified to conform with the presentation adopted
for 2003.





---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5     Segmented Information

|                                                      |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  
|----------------------------------------------------- |  | ---------- | ------- | --------- |  | --------- | ------ | ----- |  | -------------- | ------ | ------ |  | - | ------- | --------- |  | ------------ | ------ | - |  | - | ------- | -
|                                                      |  | Less-than- |         |           |  |           |        |       |  |                |        |        |  |   |         | Corporate |  | Consolidated
|Six months ended June 30, 2003                        |  | truckload  |         | Logistics |  | Truckload |        | Total |  | office & other |        | totals
|                                                      |  |            |         |           |  |           |        |       |  |                |        |       
|Revenue                                               |  | $          | 188,959 |           |  | $         | 19,330 |       |  | $              | 23,547 |        |  | $ | 231,836 |           |  | $            |       |   |  | $ | 231,836 |  
|Operating, selling, general
& administrative expenses |  |            | 175,878 |           |  |           | 18,805 |       |  |                | 22,745 |        |  |   | 217,428 |           |  |              | 1,763  |   |  |   | 219,191 |  
|Depreciation                                          |  |            | 3,373   |           |  |           | 155    |       |  |                | 362    |        |  |   | 3,890   |           |  |              | 37     |   |  |   | 3,927   |  
|                                                      |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  
|Income (loss) from operations                         |  | $          | 9,708   |           |  | $         | 370    |       |  | $              | 440    |        |  | $ | 10,518  |           |  | $            | (1,800 | ) |  |   | 8,718   |  
|Interest expense, net                                 |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   | (1,169  | )
|Loss on sale of fixed assets                          |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   | (130    | )
|Income taxes                                          |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   | 1,555   |  
|                                                      |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  
|Net income                                            |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  | $ | 5,864   |  
|                                                      |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  

|                                                      |  |            |        |           |  |           |       |       |  |                |        |        |  |   |         |           |  |              |      |   |  |   |         |  
|----------------------------------------------------- |  | ---------- | ------ | --------- |  | --------- | ----- | ----- |  | -------------- | ------ | ------ |  | - | ------- | --------- |  | ------------ | ---- | - |  | - | ------- | -
|                                                      |  | Less-than- |        |           |  |           |       |       |  |                |        |        |  |   |         | Corporate |  | Consolidated
|Three months ended June 30, 2003                      |  | truckload  |        | Logistics |  | Truckload |       | Total |  | office & other |        | totals
|                                                      |  |            |        |           |  |           |       |       |  |                |        |       
|Revenue                                               |  | $          | 94,740 |           |  | $         | 9,854 |       |  | $              | 11,779 |        |  | $ | 116,373 |           |  | $            |     |   |  | $ | 116,373 |  
|Operating, selling, general
& administrative expenses |  |            | 87,220 |           |  |           | 9,511 |       |  |                | 11,264 |        |  |   | 107,995 |           |  |              | 859  |   |  |   | 108,854 |  
|Depreciation                                          |  |            | 1,603  |           |  |           | 77    |       |  |                | 188    |        |  |   | 1,868   |           |  |              | 19   |   |  |   | 1,887   |  
|                                                      |  |            |        |           |  |           |       |       |  |                |        |        |  |   |         |           |  |              |      |   |  |   |         |  
|Income (loss) from operations                         |  | $          | 5,917  |           |  | $         | 266   |       |  | $              | 327    |        |  | $ | 6,510   |           |  | $            | (878 | ) |  |   | 5,632   |  
|Interest expense, net                                 |  |            |        |           |  |           |       |       |  |                |        |        |  |   |         |           |  |              |      |   |  |   | (489    | )
|Loss on sale of fixed assets                          |  |            |        |           |  |           |       |       |  |                |        |        |  |   |         |           |  |              |      |   |  |   | (189    | )
|Income taxes                                          |  |            |        |           |  |           |       |       |  |                |        |        |  |   |         |           |  |              |      |   |  |   | 1,186   |  
|                                                      |  |            |        |           |  |           |       |       |  |                |        |        |  |   |         |           |  |              |      |   |  |   |         |  
|Net income                                            |  |            |        |           |  |           |       |       |  |                |        |        |  |   |         |           |  |              |      |   |  | $ | 3,768   |  
|                                                      |  |            |        |           |  |           |       |       |  |                |        |        |  |   |         |           |  |              |      |   |  |   |         |  

|                                                      |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  
|----------------------------------------------------- |  | ---------- | ------- | --------- |  | --------- | ------ | ----- |  | -------------- | ------ | ------ |  | - | ------- | --------- |  | ------------ | ------ | - |  | - | ------- | -
|                                                      |  | Less-than- |         |           |  |           |        |       |  |                |        |        |  |   |         | Corporate |  | Consolidated
|Six months ended June 30, 2002                        |  | truckload  |         | Logistics |  | Truckload |        | Total |  | office & other |        | totals
|                                                      |  |            |         |           |  |           |        |       |  |                |        |       
|Revenue                                               |  | $          | 185,512 |           |  | $         | 23,681 |       |  | $              | 26,629 |        |  | $ | 235,822 |           |  | $            |       |   |  | $ | 235,822 |  
|Operating, selling, general
& administrative expenses |  |            | 172,464 |           |  |           | 22,986 |       |  |                | 25,316 |        |  |   | 220,766 |           |  |              | 2,783  |   |  |   | 223,549 |  
|Depreciation                                          |  |            | 3,719   |           |  |           | 171    |       |  |                | 273    |        |  |   | 4,163   |           |  |              | 32     |   |  |   | 4,195   |  
|                                                      |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  
|Income (loss) from operations                         |  | $          | 9,329   |           |  | $         | 524    |       |  | $              | 1,040  |        |  | $ | 10,893  |           |  | $            | (2,815 | ) |  |   | 8,078   |  
|Interest expense, net                                 |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   | (2,848  | )
|Loss on sale of fixed assets                          |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   | (424    | )
|Income taxes                                          |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   | 1,005   |  
|                                                      |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  
|Net income                                            |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  | $ | 3,801   |  
|                                                      |  |            |         |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  

|                                                      |  |            |        |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  
|----------------------------------------------------- |  | ---------- | ------ | --------- |  | --------- | ------ | ----- |  | -------------- | ------ | ------ |  | - | ------- | --------- |  | ------------ | ------ | - |  | - | ------- | -
|                                                      |  | Less-than- |        |           |  |           |        |       |  |                |        |        |  |   |         | Corporate |  | Consolidated
|Three months ended June 30, 2002                      |  | truckload  |        | Logistics |  | Truckload |        | Total |  | office & other |        | totals
|                                                      |  |            |        |           |  |           |        |       |  |                |        |       
|Revenue                                               |  | $          | 95,585 |           |  | $         | 12,158 |       |  | $              | 13,833 |        |  | $ | 121,576 |           |  | $            |       |   |  | $ | 121,576 |  
|Operating, selling, general
& administrative expenses |  |            | 88,008 |           |  |           | 11,733 |       |  |                | 13,129 |        |  |   | 112,870 |           |  |              | 1,104  |   |  |   | 113,974 |  
|Depreciation                                          |  |            | 1,778  |           |  |           | 87     |       |  |                | 124    |        |  |   | 1,989   |           |  |              | 16     |   |  |   | 2,005   |  
|                                                      |  |            |        |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  
|Income (loss) from operations                         |  | $          | 5,799  |           |  | $         | 338    |       |  | $              | 580    |        |  | $ | 6,717   |           |  | $            | (1,120 | ) |  |   | 5,597   |  
|Interest expense, net                                 |  |            |        |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   | (1,418  | )
|Loss on sale of fixed assets                          |  |            |        |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   | (135    | )
|Income taxes                                          |  |            |        |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   | 1,136   |  
|                                                      |  |            |        |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  
|Net income                                            |  |            |        |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  | $ | 2,908   |  
|                                                      |  |            |        |           |  |           |        |       |  |                |        |        |  |   |         |           |  |              |        |   |  |   |         |  





---



##### 



CORPORATE DIRECTORY

Directors

Carl J. CookDecisions Inc. L.L.C.

G. Mark CurryPresident
Revmar Inc.

Rick E. GaetzPresident & Chief Executive Officer
Vitran Corporation Inc.

Albert Gnat, Q.C.Senior Partner
Lang Michener

Anthony F. GriffithsIndependent Consultant
& Corporate Director

Richard D. McGrawPresident
Lochan Ora Group of Companies

Graham W. SavageManaging Director
Callisto Capital LP

Corporate Officers

Richard D. McGrawChairman

Rick E. GaetzPresident & Chief Executive Officer

Kevin A. GlassVice President Finance &
Chief Financial Officer

Corporate Executive Office

Vitran Corporation Inc.
185 The West Mall
Suite 701
Toronto, Ontario
Canada M5J 2M4
Tel: (416) 596-7664
Fax: (416) 596-8039

Operating Headquarters

Canadian LTL OfficeVitran Express Canada
751 Bowes Road
Concord, Ontario
Canada L4K 5C9
Tel: (416) 798-4965
Fax: (416) 798-4753

Canada/United States
Logistics OfficeVitran Logistics
751 Bowes Road
Concord, Ontario
Canada L4K 5C9
Tel: (416) 798-4965
Fax: (905) 738-4140

United States LTL OfficeVitran Express Inc.
6500 East 30th Street
Indianapolis, Indiana
U.S.A. 46219
Tel: (317) 803-6400
Fax: (317) 543-1230

United States Truckload OfficeFrontier Transport Corporation
1560 W. Raymond Street
Indianapolis, Indiana
U.S.A. 46221
Tel: (317) 636-1641
Fax: (317) 634-0321

Stock Exchange Listings

The Toronto Stock Exchange
Stock Symbol: VTN.A
The American Stock Exchange
Stock Symbol: VVN