1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.__)

Filed by the Registrant[X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

MOTOR CARGO INDUSTRIES, INC.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)

________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:

___________________________________________________________________________
2) Aggregate number of securities to which transaction applies:

___________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

___________________________________________________________________________
4) Proposed maximum aggregate value of transaction:

___________________________________________________________________________
5) Total fee paid:

___________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:

___________________________________________________________________________
3) Filing Party:

___________________________________________________________________________

4) Date Filed:

___________________________________________________________________________

2
MOTOR CARGO INDUSTRIES, INC.

845 WEST CENTER STREET
NORTH SALT LAKE, UTAH 84054

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 22, 1998

May 6, 1998

To the Shareholders of Motor Cargo Industries, Inc.:

You are cordially invited to attend the Annual Meeting of Shareholders
(the "Meeting") of Motor Cargo Industries, Inc., a Utah Corporation (the
"Company"), to be held on Monday, June 22, 1998, at 11:00 a.m., local time, at
the Little America Hotel & Towers, 500 South Main Street, Salt Lake City, Utah
for the following purposes:

1. To elect five directors.

2. To ratify the selection of Grant Thornton LLP as independent
auditors to audit the Consolidated Financial Statements of the Company and its
subsidiaries for the year ending December 31, 1998.

3. To transact such other business as may properly come before the
Meeting or any adjournments of the Meeting.

Only holders of record of the Company's common stock, no par value, at
the close of business on April 15, 1998 will be entitled to notice of and to
vote at the Meeting. Please sign, date and mail the enclosed proxy so that your
shares may be represented at the Meeting if you are unable to attend and vote in
person.

By order of the Board of Directors.

MARVIN L. FRIEDLAND
Vice President, General Counsel
and Secretary

3
MOTOR CARGO INDUSTRIES INC.
845 WEST CENTER STREET
NORTH SALT LAKE, UTAH 84054

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD JUNE 22, 1998

INTRODUCTION

This Proxy Statement is being furnished to the Shareholders (the
"Shareholders") of Motor Cargo Industries, Inc., a Utah corporation (the
"Company"), in connection with the solicitation of proxies by the Board of
Directors for use at the Annual Meeting of Shareholders of the Company (the
"Meeting") to be held on June 22, 1998 and at any adjournments thereof.

At the Meeting, Shareholders will be asked:

(1) To elect five directors.

(2) To ratify the selection of Grant Thornton LLP as independent
auditors to audit the Consolidated Financial Statements of the Company for the
year ending December 31, 1998.

(3) To transact such other business as may properly come before the
Meeting or any adjournments of the Meeting.

The Board of Directors has fixed the close of business on April 15,
1998 as the record date for the determination of the holders of common stock, no
par value ("Common Stock") entitled to notice of and to vote at the Meeting.
Each such Shareholder will be entitled to one vote for each share of Common
Stock held on all matters to come before the Meeting and may vote in person or
by proxy authorized in writing. At the close of business on April 15, 1998,
there were 6,990,000 shares of Common Stock entitled to vote.

This Proxy Statement and the accompanying form of proxy are first
being sent to holders of the Common Stock on or about May 6, 1998.

THE MEETING

DATE, TIME AND PLACE

The Meeting will be held on June 22, 1998, at 11:00 a.m., local time,
at the Little America Hotel & Towers, 500 S. Main Street, Salt Lake City, Utah.

MATTERS TO BE CONSIDERED

At the Meeting, Shareholders will be asked to consider and vote to
elect five directors and to ratify the selection of independent auditors. See
"ELECTION OF DIRECTORS" and "RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS".
The Board of Directors knows of no matters that are to be brought before the
Meeting other than as set forth in the Notice of Meeting. If any other matters
properly come before the Meeting, the persons named in the enclosed form of
proxy or their substitutes will vote in accordance with their best judgment on
such matters.

RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE

Shareholders as of the Record Date (i.e., the close of business on
April 15, 1998) are entitled to notice of and to vote at the Meeting. As of the
Record Date, there were 6,990,000 shares of Common Stock outstanding and
entitled to be voted. Each share of Common Stock entitles its holder to one
vote.

REQUIRED VOTES

Election of Directors. Under Utah law, the affirmative vote of the
holders of a plurality of the shares of Common Stock voted at the Meeting is
required to elect each director. Consequently, only shares that are voted in
favor of a particular nominee will be counted toward such nominee's achievement
of a plurality. Shares present at the Meeting that are not voted for a
particular nominee or shares present by proxy where the Shareholder properly
withheld authority to vote for such nominee (including broker non-votes) will
not be counted toward such nominee's achievement of a plurality.

Ratification of Selection of Independent Auditors. The ratification of
the selection of Grant Thornton LLP as independent auditors is being submitted
to Shareholders because the Board of Directors believes that such action follows
sound corporate practice and is in the best interests of the Shareholders. If
the Shareholders do not ratify the selection by the affirmative vote of a
majority of the shares of Common Stock voted at the Meeting, the selection of
independent auditors will be reconsidered by the Board. If the Shareholders
ratify the selection, the Board, in its discretion, may still direct the
appointment of new independent auditors at any time during the year if the Board
believes that such a change would be in the interests of the Company and its
Shareholders. Abstentions and broker non-votes will not be counted in
determining the votes cast in connection with the ratification of auditors, but
will have the effect of reducing the number of affirmative votes required to
achieve a majority for such matter by reducing the total number of shares from
which the majority will be calculated.

Principal Shareholder. The Company has been advised by its principal
shareholder, Harold R. Tate, that he intends to vote the 3,890,000 shares of
Common Stock which he owns, representing approximately 56% of the Company's
outstanding shares of Common Stock, FOR the election of the five persons
nominated by the Board of Directors to serve as directors, and FOR the
ratification of the selection of Grant Thornton LLP as the Company's independent
auditors to audit the accounts of the Company and its subsidiaries for 1998.

2
5

VOTING AND REVOCATION OF PROXIES

Shareholders are requested to complete, date, sign and promptly return
the accompanying form of proxy in the enclosed envelope. Shares of Common Stock
represented by properly executed proxies received by the Company and not revoked
will be voted at the Meeting in accordance with the instructions contained
therein. If instructions are not given, proxies will be voted FOR election of
each nominee for director named herein and FOR ratification of the selection of
independent auditors.

Any proxy signed and returned by a Shareholder may be revoked at any
time before it is voted by filing with the Secretary of the Company, at the
address of the Company set forth herein, written notice of such revocation or a
duly executed proxy bearing a later date or by attending the Meeting and voting
in person. Attendance at the Meeting will not in and of itself constitute
revocation of a proxy.

PROXY SOLICITATION

The Company will bear the costs of solicitation of proxies for the
Meeting. In addition to solicitation by mail, directors, officers and regular
employees of the Company may solicit proxies from Shareholders by telephone,
telegram, personal interview or otherwise. Such directors, officers and
employees will not receive additional compensation but may be reimbursed for
out-of-pocket expenses in connection with such solicitation. Brokers, nominees,
fiduciaries and other custodians have been requested to forward soliciting
material to the beneficial owners of shares of Common Stock held of record by
them, and such custodians will be reimbursed for their reasonable expenses.

INDEPENDENT AUDITORS

The Company has been advised that representatives of Grant Thornton
LLP, the Company's independent auditors for 1997, will attend the Meeting, will
have an opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.

ELECTION OF DIRECTORS

At the Meeting, five directors are to be elected to serve until the
next Meeting or until their successors are elected and qualified. The persons
named in the enclosed form of proxy have advised that, unless contrary
instructions are received, they intend to vote FOR the five nominees named by
the Board of Directors and listed on the following table. The Board of Directors
does not expect that any of the nominees will be unavailable for election as a
director. However, if by reason of an unexpected occurrence one or more of the
nominees is not available for election, the persons named in the form of proxy
have advised that they will vote for such substitute nominees as the Board of
Directors of the Company may propose. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE ELECTION OF ALL NOMINEES NAMED BELOW.

The names and certain information concerning the experience and
background of the nominees for election as directors are set forth below.

3
6

NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------

Harold R. Tate 71 Chairman of the Board, Director
Marshall L. Tate 35 President and Chief Executive Officer, Director
Marvin L. Friedland 56 Vice President, General Counsel and Secretary, Director
Robert Anderson 76 Director
James Clayburn LaForce, Jr. 68 Director

Harold R. Tate has over 50 years experience in the trucking industry
and has served as Chairman of the Board of the Company and its predecessors
since 1947. Mr. Tate served as Chief Executive Officer of the Company and its
predecessors from 1947 to March 1997. Mr. Tate also serves as a member of the
Board of Trustees of the Buffalo Bill Historical Center.

Marshall L. Tate has over 13 years experience in the trucking
industry. Mr. Tate has been employed by the Company since 1984, has served as
its President and Chief Executive Officer since March 1997, and was appointed to
the Board of Directors of the Company in 1996. Prior to becoming the Company's
President and Chief Executive Officer, Mr. Tate served in various divisional
positions as well as Vice President of Sales and Marketing and Executive Vice
President of Corporate Development for Motor Cargo. In 1995, Mr. Tate directed
the start-up of the Company's logistics warehousing and distribution management
services subsidiary, MC Distribution Services. Marshall L. Tate is the son of
Harold R. Tate.

Marvin L. Friedland has served as Vice President and General Counsel
of the Company and its predecessors since 1982. Prior to joining the Company,
Mr. Friedland was an attorney in private practice. Mr. Friedland was appointed
to the Board of Directors in 1996. Mr. Friedland is a Certified Public
Accountant and a member of the California Bar and the Utah Bar.

Robert Anderson has served as a director of the Company since December
1, 1997. Mr. Anderson was formerly Chairman and Chief Executive Officer of
Rockwell International Corporation. He has served as Chairman Emeritus of
Rockwell International Corporation since 1990. Mr. Anderson is also a director
of Gulfstream Aerospace Corporation, Optical Data Systems, Inc. and The Timken
Company.

James Clayburn LaForce, Jr. has served as a director of the Company
since December 1, 1997. Mr. LaForce is Dean Emeritus of the John B. Anderson
School of Management, University of California, Los Angeles. He is also a
director of Eli Lilly and Company, Rockwell International Corporation, Jacobs
Engineering Group, Inc., The Black Rock Funds, Imperial Credit Industries, Inc.,
Provident Investment Council Mutual Funds and The Timken Company.

4
7

INFORMATION CONCERNING
THE BOARD OF DIRECTORS

MEETINGS AND COMMITTEES

Prior to November 28, 1997, the Board of Directors had no committees.
On November 28, 1997, the Board of Directors established an Audit Committee and
a Compensation Committee.

The functions of the Audit Committee are to recommend to the Board
independent auditors for the Company, to analyze the reports and recommendations
of such auditors and to review internal audit procedures and controls. The Audit
Committee consists of Messrs. Anderson and LaForce. No meetings of the Audit
Committee were held in 1997.

The functions of the Compensation Committee are to review and adjust
the salaries of the principal officers and key executives of the Company. The
Compensation Committee also administers the Company's executive compensation and
benefit plans. The Compensation Committee consists of Marshall L. Tate, Robert
Anderson and James Clayburn LaForce, Jr. No meetings of the Compensation
Committee were held in 1997.

The Board of Directors held a total of three regular meetings in 1997
and took certain actions by unanimous written consent. During 1997, each
incumbent director attended 75% or more of the total number of meetings of the
Board that were held during the periods he served.

5
8

PRESENT BENEFICIAL OWNERSHIP OF COMMON STOCK

Set forth below is certain information as of March 31, 1998 with
respect to the beneficial ownership of shares of Common Stock by (i) each person
who, to the knowledge of the Company, is the beneficial owner of more than 5% of
the outstanding shares of Common Stock (the Company's only class of voting
securities), (ii) each director and nominee for director, (iii) executive
officers named in the Summary Compensation Table on page 7 (the "Named Executive
Officers") and (iv) all directors and executive officers as a group.

Name and Address Amount and Nature of Percent of
of Beneficial Owner(1) Beneficial Ownership(2) Class
- ---------------------- ----------------------- ----------

Certain Beneficial Owners:

Group consisting of:
Dresdner RCM Global Investors LLC
RCM Limited L.P.
RCM General Corporation(3) 360,500 5.16%

Directors:

Harold R, Tate 3,890,000 55.65%

Marshall L. Tate 184,153 2.63%

Marvin L. Friedland 184,153 2.63%

Robert Anderson -- --

James Clayburn LaForce, Jr -- --

Nondirector Named
Executive Officers:

Louis V. Holdener 20,600 *

Lynn H. Wheeler -- --

All directors and
executive officers as a
group (11 persons) 4,279,621 61.22%

- ----------------------

* Less than 1%

(1) Unless otherwise indicated in these footnotes, the mailing address of each
beneficial owner listed is 845 West Center Street, North Salt Lake, Utah
84154.

(2) Except as otherwise noted, each of the beneficial owners listed in the
above table has, to the knowledge of the Company, sole voting and
investment power with respect to the indicated shares of Common Stock.

(3) According to a Statement on Schedule 13G dated January 30, 1998, 360,500
shares are beneficially owned by Dresdner RCM Global Investors LLC
("Dresdner RCM"). RCM Limited L.P. is the Managing Agent of Dresdner RCM,
and RCM General Corporation is the General Partner of RCM Limited L.P. The
mailing address for this group is Four Embarcadero Center, San Francisco,
California 94111.

EXECUTIVE COMPENSATION

Set forth below is certain information with respect to the
compensation paid by the Company to the Chairman of the Board, the President and
Chief Executive Officer and each of the other three most highly compensated
current executive officers of the Company, for services in all capacities to the
Company and its subsidiaries during the years ended 1997 and 1996.

SUMMARY COMPENSATION TABLE

LONG TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION(1) AWARDS PAYOUTS
------------------------------------------- ------------------------ ------- -------
OTHER SECURITIES ALL
ANNUAL RESTRICTED UNDERLYING OTHER
NAME AND PRINCIPAL COMPEN- STOCK OPTIONS/ LTIP COMPEN-
POSITION YEAR SALARY BONUS SATION(2) AWARD(S) SARS(3) PAYOUTS SATION(4)
($) ($) ($) ($) (#) ($) ($)
- ------------------------------------------------------------------------------- ---------- ---------- -----------------

Harold R. Tate 1997 150,625 -- -- -- -- - --
Chairman 1996 105,000 -- -- -- -- - --
Chief Executive Officer
until March 19, 1997(5)
Marshall L. Tate 1997 137,583 29,155 -- -- 40,000 - --
President 1996 118,917 15,344 -- -- -- - --
Chief Executive Officer
since March 19, 1997(5)
Marvin L. Friedland 1997 134,729 23,734 950 -- 25,000 - $16,301
Vice President and 1996 126,625 15,344 4,560 -- -- - $17,555
General Counsel
Louis V. Holdener 1997 127,917 29,456 -- 20,000(6) 30,000 - $17,068
President of Motor Cargo 1996 121,667 17,844 -- -- -- - $16,927
Lynn H. Wheeler 1997 103,500 23,456 -- -- 20,000 - $15,518
Vice President of Finance 1996 90,125 15,344 -- -- -- - $16,612
and Chief Financial Officer

- ---------------------

(1) Amounts in this table include payments made to certain Named Executive
Officers by Ute Trucking and Leasing, L.L.C. during 1996 and 1997. Amounts
in this table do not include certain payments made by the Company in 1996
to PDLM Consulting Limited, a company in which Harold R. Tate owns a 50%
equity interest. See "Certain Relationships and Related Transactions."

(2) The amount in this column for Mr. Friedland consists of a cash automobile
allowance.

(3) The options set forth in this column were granted on November 24, 1997 in
connection with the Company's initial public offering. The options have an
exercise price of $12.00 per share and vest in equal installments over a
four year period.

(4) Amounts in this column include matching contributions made by the Company
under its 401(k) plan on behalf of Mr. Friedland, Mr. Holdener and Mr.
Wheeler of $2,629, $2,063 and $2,299, respectively, in 1996 and $2,651,
$3,422 and $2,428, respectively in 1997. Amounts in this column also
include accrued benefits under salary continuation agreements between the
Company and Mr. Friedland, Mr. Holdener and Mr. Wheeler of $14,926, $14,864
and $14,313, respectively, in 1996 and $13,650, $13,646 and $13,090,
respectively, in 1997.

(5) Harold R. Tate resigned from the office of Chief Executive Officer on March
19, 1997, retaining his position as Chairman of the Board. At that time,
Marshall L. Tate was appointed Chief Executive Officer. Effective September
1, 1997, Harold R. Tate's annual salary was increased to $250,000 and
Marshall L. Tate's annual salary was increased to $175,000.

(6) Pursuant to a Restricted Stock Agreement, dated October 2, 1997, the Board
of Directors awarded Louis V. Holdener 20,000 shares of the Company's
Common Stock. The Company holds the certificates for the shares, which will
be released to Mr. Holdener in four installments, each consisting of 25% of
the shares issued under the agreement, on January 1 of 1998, 1999, 2000 and
2001. The shares not released are subject to forfeiture in the event Mr.
Holdener voluntarily ceases his continuous employment with the Company or
the Company terminates his employment for cause. Termination of employment
by the Company without cause, or termination due to disability or death
before January 1, 1999 will result in the forfeiture of 10,000 shares. Such
termination on or after January 1, 1999 will result in the release of all
shares not previously released. Notwithstanding the scheduled release of
shares and the forfeiture provisions, the Board of Directors may, in its
discretion, release any or all shares held by the Company at any time.
Pending release or forfeiture of the restricted shares, Mr. Holdener may
exercise all rights of a shareholder with respect to the restricted shares,
except the right to pledge or convey ownership. At December 31, 1997, the
dollar value of the unreleased shares was $240,000.

STOCK OPTIONS

The following table provides information related to options to
purchase shares of the Company's Common Stock granted to the Named Executive
Officers during 1997. The Company has never granted any freestanding stock
appreciation rights. None of the Named Executive Officers exercised any options
during 1997.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option
Terms(3)
- ----------------------------------------------------------------------------------------- --------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted Exercise or
Options/SARs to Employees Base Price(1) Expiration
Name Granted (#) in Fiscal Year ($/Sh) Date(2) 5%($) 10%($)
- ---- ----------- -------------- ------ ------- ----- ------

Marshall L. Tate 40,000 17.43% $ 12.00 11/24/07 $301,869 $764,996

Marvin L. Friedland 25,000 10.89% $ 12.00 11/24/07 $188,668 $478,123

Louis V. Holdener 30,000 13.07% $ 12.00 11/24/07 $226,402 $573,747

Lynn H. Wheeler 20,000 8.71% $ 12.00 11/24/07 $150,935 $382,498

- ----------------------

(1) Fair market value on date of grant.

(2) Subject to earlier termination under certain circumstances.

(3) Potential realizable value is calculated based on an assumption that the
price of the Company's Common Stock appreciates at the annual rates shown
(5% and 10%), compounded annually, from the date of grant of the option
until the end of the option term. The value is net of the exercise price
but is not adjusted for the taxes that would be due upon exercise. The 5%
and 10% assumed rates of appreciation are mandated by the rules of the
Securities and Exchange Commission and do not represent the Company's
estimate or projection of future stock prices. Actual gains, if any, upon
future exercise of any of these options will depend upon the actual
performance of the Company's Common Stock.

The following table provides information as to options exercised by
each of the Named Executive Officers during 1997, and the value of options held
by such Executives at the end of 1997 measured in terms of the last reported
sale price for the Company's Common Stock on December 31, 1997 ($12.00, as
reported on the Nasdaq National Market System).

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

Shares Number of Securities
Acquired Underlying Unexercised Value of Unexercised In-the-Money
on Value Options/SARs at FY-End (#) Options/SARs at FY End ($)
Name Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------ -------- ------------------------- -------------------------

Marshall L. Tate - - 0/40,000 0/0
Marvin L. Friedland - - 0/25,000 0/0
Louis V. Holdener - - 0/30,000 0/0
Lynn H. Wheeler - - 0/20,000 0/0

8
11

1997 STOCK OPTION PLAN

On October 1, 1997, the Company's Board of Directors adopted the Motor
Cargo Industries, Inc. 1997 Stock Option Plan (the "1997 Stock Option Plan").
The purpose of the 1997 Stock Option Plan is to provide certain of the Company's
key employees who are responsible for the continued growth of the Company an
opportunity to acquire a proprietary interest in the Company and thereby create
in such key employees an increased interest in and a greater concern for the
welfare of the Company.

The Compensation Committee of the Board of Directors administers the
1997 Stock Option Plan. Under the terms of the 1997 Stock Option Plan, the
committee of the Board of Directors administering the plan is required to be
composed of two or more directors. The Compensation Committee has the authority
to interpret the 1997 Stock Option Plan and to determine and designate the
persons to whom options or awards shall be made and the terms, conditions and
restrictions applicable to each option or award (including, but not limited to,
the price, any restriction or limitation, any vesting schedule or acceleration
thereof, and any forfeiture restrictions). The Board of Directors may amend the
1997 Stock Option Plan but may not, without the prior approval of the
shareholders of the Company, amend the plan to increase the total number of
shares reserved for options and rights under the plan, reduce the exercise price
of any incentive stock option granted under the plan, modify the provisions of
the plan relating to eligibility, or materially increase the benefits accruing
to participants under the plan.

The Company has reserved 500,000 shares of Common Stock for issuance
pursuant to the 1997 Stock Option Plan. On November 24, 1997, non-qualified
options to purchase 229,500 shares of Common Stock at $12.00 per share were
granted to employees of the Company, including an aggregate of 115,000 options
to certain Named Executive Officers, as described above. On January 28, 1998,
additional non-qualified options to purchase an aggregate of 48,500 shares of
Common Stock at $12.50 per share were granted to employees of the Company. All
of the Company's outstanding options vest over a four year period, with 25% of
these options vesting on each of the first, second, third and fourth
anniversaries of the date of grant.

The 1997 Stock Option Plan contains provisions for granting various
stock-based awards, including incentive stock options as defined in Section 422
of the Internal Revenue Code of 1986, nonqualified stock options and stock
appreciation rights. The term of the 1997 Stock Option Plan is ten years,
subject to earlier termination or amendment.

401(k) PROFIT SHARING PLAN

The Company maintains a defined contribution plan (the "401(k) Plan"),
which is intended to satisfy the tax qualification requirements of the Internal
Revenue Code of 1986, as amended (the "Code"). All Company personnel who work
1,000 or more hours per year are eligible to participate in the 401(k) Plan
after one year of service with the Company. The 401(k) Plan permits participants
to contribute between 1% and 15% of their annual compensation from the Company,
subject to the limit imposed by the Code. The Company is obligated to match at
least 25% of employee contributions, up to 6% of a participant's annual
compensation. All

9
12

amounts contributed by a participant fully vest immediately. A participant
becomes vested over time and is fully vested in any Company matching
contributions after seven years of service. The 401(k) Plan also permits
discretionary contributions by the Company. Expenses for Company contributions
amounted to $344,815, $310,000 and $525,000 in 1995, 1996 and 1997,
respectively.

PENSION PLAN

The Company has a defined benefit pension plan (the "Pension Plan")
covering substantially all of its employees. Benefits under the Pension Plan are
based upon years of service and hours of service in each year of service. A
participant is fully vested after five years of employment. Once vested,
employees are entitled to receive an annual benefit for each year of service in
which such employee worked at least 1,000 hours. The amount of benefit for each
year of service ranges from $144 for 1,000 hours of service to $240 for 1,800
hours or more of service. Harold R. Tate receives an annual benefit of $17,256
under the Pension Plan. The estimated annual benefits payable upon retirement at
normal retirement age for Marshall L. Tate, Marvin L. Friedland, Louis V.
Holdener and Lynn H. Wheeler are $6,025, $5,832, $7,320 and $5,572,
respectively.

SALARY CONTINUATION AGREEMENTS

The Company has salary continuation agreements with certain key
management employees, including Marvin L. Friedland, Louis V. Holdener and Lynn
H. Wheeler. Under the agreements, the Company is obligated to provide for each
such employee or his beneficiaries, during a period of not more than ten years
after the employee's death, disability or retirement, annual benefits ranging
from $17,000 to $23,000.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Prior to November 28, 1997, the Board of Directors did not have a
compensation committee and the Board of Directors as a whole determined the
compensation to be paid to the executive officers of the Company. On November
28, 1997, the Board of Directors established a compensation committee. The
functions of the Compensation Committee are to review and adjust the salaries of
the principal officers and key executives of the Company. The Compensation
Committee also administers the Company's executive compensation and benefit
plans. The Compensation Committee consists of Marshall L. Tate, Robert Anderson
and James Clayburn LaForce, Jr.

The Compensation Committee considers a number of factors in
establishing compensation for executive officers, including the Chief Executive
Officer and the other Named Executive Officers. The goal of the Compensation
Committee is to create compensation packages for officers and key employees
which will attract, retain and motivate executive personnel who are capable of
achieving the Company's short-term and long-term financial and strategic goals.
Executive compensation at the Company is made up of three elements: (i) base
salary, (ii) bonuses and (iii) grants of equity-based compensation (e.g. stock
options and restricted stock).

10
13

Base Salary. Base salaries for all of the executive officers of the
Company for 1996 and 1997 were established by the Board of Directors of the
Company based upon each employee's job responsibilities. On January 27, 1998,
the Compensation Committee reviewed the salaries for officers and executives of
the Company and determined that no changes in base salary levels were necessary.

Bonuses. The Board of Directors awarded cash bonuses to executive
officers during 1996 and 1997 based upon the financial performance of the
Company. The Compensation Committee will award bonuses for 1998. The
Compensation Committee will consider a number of factors in awarding bonuses,
including the financial performance of the Company and the achievement by the
Company of short-term and long-term financial and strategic goals.

Stock Options and Restricted Stock. In addition to salary and bonus,
the Company has adopted the 1997 Stock Option Plan. Under the 1997 Stock Option
Plan, officers and key employees are eligible to receive awards of stock
options, stock appreciation rights and restricted stock. The number of stock
options and/or shares of restricted stock granted to each executive officer is
determined by a competitive compensation analysis and each individual's salary
and responsibility.

Marshall L. Tate
Robert Anderson
James Clayburn LaForce, Jr.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee consists of the Company's President and
Chief Executive Officer and two non-employee directors. Currently, the members
of the Compensation Committee are Marshall L. Tate, Robert Anderson and James
Clayburn LaForce, Jr. None of the executive officers of the Company serve as a
director of another corporation in a case where an executive officer of such
other corporation serves as a Director of the Company.

CORPORATE PERFORMANCE

The following graph compares the performance (total return on
investment as measured by the change in the year-end stock price plus reinvested
dividends) of $100 invested in the Common Stock of the Company with that of $100
invested in the U.S. Nasdaq Index and $100 invested in the Nasdaq Trucking Index
for the period from November 24, 1997 to December 31, 1997. Index data was
furnished by Standard & Poor's Compustat Services, Inc. Prior to the Company's
initial public offering in November 1997, there was no established trading
market for the Company's Common Stock. Accordingly, no performance comparison is
presented for any period prior to November 25, 1997.

11
14

[GRAPHIC MATERIAL OMITTED: THE COMPANY'S SHAREHOLDER RETURN
PERFORMANCE GRAPH IS DESCRIBED IN TABULAR DATA FORM BELOW]

INDEXED RETURNS

Base Years
Period Ending
25Nov97 Dec97
--- ------

MOTOR CARGO INDUSTRIES INC 100 100.00
US NASDAQ 100 98.44
NASDAQ TRUCKING 100 101.12

COMPENSATION OF DIRECTORS

The Company pays each non-employee director $2,500 for each meeting of
the Board of Directors and $500 for each telephonic meeting of the Board of
Directors attended. The Company also reimburses such directors for their
expenses incurred in connection with their activities as directors. On November
24, 1997, in connection with the Company's initial public offering, a
non-qualified option to purchase 10,000 shares of Common Stock at the initial
public offering price of $12.00 per share was granted to each of Robert Anderson
and James Clayburn LaForce, Jr. These options vest over a four-year period, with
25% of these options vesting on each of the first, second, third and fourth
anniversaries of the date of grant.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Effective August 28, 1997, the Company acquired Ute Trucking and
Leasing, L.L.C. ("Ute"). Ute's assets consist primarily of tractors and trailers
utilized by the Company pursuant to contracts between the Company and Ute. The
Company issued an aggregate of 700,000 shares of Common Stock to the four owners
of Ute, Harold R. Tate, Marshall L. Tate, Darrell Tate and Marvin L. Friedland,
in exchange for their interests in Ute. Harold R. Tate is the principal
shareholder and the Chairman of the Board of Directors of the Company. Marshall
L. Tate is the President and Chief Executive Officer and a director of the
Company. Marvin L. Friedland is Vice President and General Counsel, Secretary
and a director of the Company. Harold R. Tate, Marshall L. Tate and Marvin L.
Friedland received 490,000, 70,000 and 70,000 shares of Common Stock,
respectively, for their interests in Ute. As of August 31, 1997, the Ute assets
had a net book value of approximately $912,000 ($3,506,000 less $2,594,000 in
related debt). The aggregate lease payments on the assets paid by the Company to
Ute during 1995, 1996 and the nine months ended September 30, 1997 totaled
$3,176,675, $3,458,417 and $2,746,556, respectively. The number of shares of
Common Stock issued to the members of Ute was determined by the Company and the
members of Ute. In making such determination, the Company and the Ute members
considered a number of factors, including (i) the current and projected earnings
of Ute, (ii) the estimated per share value of the Common Stock at the time Ute
was acquired and the price per share expected to be received by the Company in
its initial public offering of Common Stock, (iii) the estimated useful life of
the Ute assets and (iv) the resale

12
15

restrictions under applicable securities laws with respect to the shares of
Common Stock issued to the Ute members. Due to the fact that three directors of
the Company had interests in Ute, the transaction was submitted to the
disinterested shareholders of the Company for their approval in accordance with
the Utah Revised Business Corporation Act. The disinterested shareholders of the
Company unanimously approved the Ute acquisition as of October 3, 1997.

Pursuant to a consulting agreement between the Company and PDLM
Consulting Limited ("PDLM") the Company has made payments to PDLM for consulting
services from 1994 to 1997. Harold R. Tate owns a 50% equity interest in PDLM.
The Company paid $480,000 to PDLM during 1996 and $160,000 to PDLM during 1997
pursuant to the terms of the consulting agreement. The consulting agreement was
terminated in April 1997.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year and Form 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, and written representations furnished to the Company, the Company
believes that during the year ended December 31, 1997, all persons subject to
the reporting requirements of Section 16(a) of the Exchange Act filed the
required reports on a timely basis.

RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS

The Board of Directors recommends that the Shareholders ratify the
selection of Grant Thornton LLP, certified public accountants, as independent
auditors to audit the accounts of the Company and its subsidiaries for 1998.
Grant Thornton LLP are currently independent auditors for the Company.

ANNUAL REPORT

A copy of the Company's Annual Report on Form 10-K to Shareholders is
being furnished to Shareholders concurrently herewith. Exhibits to the Annual
Report on Form 10-K will be furnished to Shareholders upon payment of
photocopying charges.

13
16

PROPOSALS BY SHAREHOLDERS

Proposals that Shareholders wish to include in the Company's Proxy
Statement and form of proxy for presentation at the Company's 1998 Annual
Meeting of Shareholders must be received by the Company at 845 West Center
Street, North Salt Lake, Utah 84154, Attention Marvin L. Friedland, Secretary,
no later than January 6, 1999.

By Order of the Board of Directors

Marvin L. Friedland
Vice President, General Counsel and Secretary
May 6, 1998

17
PROXY

MOTOR CARGO INDUSTRIES, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Marshall L. Tate and Marvin L.
Friedland, and each of them, as Proxies, with full power of substitution, and
hereby authorizes them to represent and vote, as designated below, all shares of
Common Stock of the Company held of record by the undersigned on April 15, 1998
at the Annual Meeting of Shareholders to be held at the Little America Hotel &
Towers, 500 South Main Street, Salt Lake City, Utah on June 22, 1998 at 11:00
a.m. (local time), or any adjournment thereof.

1. Proposal to elect five Directors:

FOR all nominees listed below WITHHOLD authority to vote
(except as indicated to the contrary below) for all nominees listed below

--- ---

INSTRUCTION: To withhold authority to vote for any individual nominee, cross a
line through the nominee's name in the list below.

Nominees: Harold R. Tate - Marshall L. Tate - Marvin L. Friedland - Robert
Anderson - James Clayburn LaForce, Jr.

2. Proposal to ratify the selection of FOR AGAINST ABSTAIN
Grant Thornton LLP as the
independent auditors to audit the
Consolidated Financial Statements
of the Company and its subsidiaries
for the year ending December 31,
1998. --- --- ---

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.

Please sign and date this Proxy where shown below and return it promptly.
No postage is required if this proxy is returned in the enclosed envelope and
mailed in the United States.

Signed: ___________________ Signed: ____________________ Date: __________, 1998

NOTE: (Please sign above exactly as the shares are registered. When shares are
held by joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.)