2000

Financial Highlight

Revenue in 2000 was $508.5 million, exceeding $500 million for the first time in Vitran's history and amounting to a 6.0% increase over the $479.8 million recorded in 1999. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 1.6% to #35.4 million compared with $34.9 million in 1999 after unusual expenses of $1.5 million arising from a personal injury claim an noise abatement settlement. Earnings before interest and taxes, or operating income (EBIT), rose 3.2% to $22.4 million versus $21.7 million in the previous year. Vitran achieved net income of 9.5 million in 2000, or $0.96 per basic share ($0.88 fully diluted), compared with $9.4 million or $0.95 per basic share ($0.87 fully diluted) in the prior 12-month period. Vitran's consolidated operating ratio (OR), a standard measurement of efficiency in the transportation business, increased slightly to 95.6% in 2000.

Operational Improvements

Improved results were recorded by many of Vitran's business units. The most encouraging gains were made by the LTL operations, led by Indianapolis-based Vitran Express, our U.S. LTL unit. Early in 1999, two Vitran companies were combined to form the third-largest next-day delivery LTL network in the U.S. central states. Response from customers was excellent, but difficulties in executing that initiative impacted operations in 1999 and the first quarter of 2000. Subsequently the business has steadily improved and is trending towards its potential. Customers are taking advantage of the exceptional transit times and premium service levels, resulting in management's expectations for above-average growth going forward. The Canadian LTL operation also had an excellent year, with productivity and service levels resulting in the best financial year in its history.

Vitran Logistics performed well and laid a strong foundation for the future by securing important new contracts. The shorthaul truckload business also had a good year despite driver shortages and fuel price pressures throughout 2000. Expected increase in owner/operator availability in 2001 should improve performance.

The Freight Connection, an 81%-owned freight brokerage operation based in Atlanta, reported a loss primarily due to lower-than-planned revenue. Management will redouble its efforts to make this business unit a positive contribution in 2001.

ETL Recycling Services in Vancouver was substantially below plan due to new plant start-up issues and lower-than-anticipated volumes. Various initiatives are being undertaken to ensure that the performance of this non-core business returns to profitability.

Unusual Expense

Fourth quarter results were impacted with the inclusion of unusual expenses arising from a personal injury claim and noise abatement settlement. These expenses, which were isolated, negatively impacted the otherwise outstanding results of the fourth quarter of 2000 by $0.09 per basic share.

Delivering Value

Vitran's strategy is to provide a broad service offering that can create valuable distribution solutions for its expanding North American client base. Accordingly, the Company has established an extensive LTL network across Canada and throughout 18 central U.S. states that can satisfy the most demanding of shippers. With increasing frequency, the Company is providing multiple services as package solutions for customers. This approach has led to more sophisticated business relationships, including Vitran assuming the complete distribution responsibility for certain clients. For this reason, we elected to make Logistics the focus of this report, providing readers with a greater understanding of how Vitran delivers value to the supply chain.

Priorities

Management had several priorities for 2000, including improving the performance at Vitran Express, achieving a lower consolidated operating ratio, further developing our technology infrastructure and maintaining a commitment to safety. We are happy to report that Vitran Express improved significant throughout the year and has good momentum going into 2001. The consolidated operating ratio was unchanged and considerable progress was made on the technology front, where we improved both internal operational and external customer interface information systems. The commitment to safety was maintained throughout our organization, and many initiatives were taken in support of the Company's policies.

E-commerce Strategy

Electronic communication and processing continues to escalate in importance to Vitran and its customers as the capability of the Internet and related technology is harnessed. Significant strides were made in 2000 throughout the organization with increasing amounts of information being made available to customers and employees/associates on an around-the-clock basis. Management's intention is to continue to rapidly develop the information flow, utilizing both the Internet and the Company's intranet to effectively meet the increasing needs of our clients and the business.

Fuel Prices

Escalating fuel prices challenged the transportation industry throughout 2000. Vitran passed on the price increases to its LTL and TL customers on an index basis and managed to remain fuel cost neutral. Fuel is generally a more serious issue in the truckload segment of the industry, where it represents a greater percentage of operating expense and the cost are more difficult to pass on to shippers. It is expected that fuel costs will remain a critical issue for the foreseeable future and management will continue to respond appropriately.

Outlook

It appears that the economies of Canada and the United States are softening relative to the buoyancy experienced during 2000. If shipping volumes decrease, the operating environment becomes more challenging. As it has successfully in the past, Vitran management will seek to leverage its variable cost systems and take other initiatives to contain costs as we pursue another record performance year.

Recognition

Vitran's success on behalf of shareholders is a reflection of the extraordinary effort of over 3,000 dedicated employees, associates and independent contractors throughout the organization. We would like to thank them for their professional efforts. We would also like to thank the shareholders and other stakeholders for the continuing support. We look forward to reporting on our progress in the coming months and years ahead.

Anthony F. Griffiths
Chairman of the Board

Richard D. McGraw
President and Chief Executive Officer