1299716--6/25/2009--U.S._Shipping_Partners

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Our common units have no value. The value of our Second Lien Notes is uncertain. We filed for reorganization under Chapter 11 on April 29, 2009 and are subject to the risks and uncertainties associated with the Bankruptcy Cases. A long period of operating under Chapter 11 could harm our business. We may not be able to obtain confirmation of our Chapter 11 plan, and our emergence from Chapter 11 proceedings is not assured. Our financial results may be volatile and may not reflect historical trends. Conducting a successful Chapter 11 reorganization will depend significantly on our ability to retain and motivate management and key employees. We may not have sufficient available cash to operate our business. Difficult conditions in the global economy and capital markets have materially adversely affected our business, results of operations and financial condition and we do not expect these conditions to improve in the near future. Our business would be adversely affected if we failed to comply with the Jones Act provisions on coastwise trade or if those provisions were modified or repealed. We must make substantial expenditures to comply with mandatory drydocking requirements for our fleet. We will need to acquire OPA 90 compliant vessels in order to maintain a significant presence in the domestic coastwise transportation of petroleum products, which will be expensive, and we currently do not have the financial ability to do so. Capital expenditures and other costs necessary to operate and maintain our vessels tend to increase with the age of the vessel and may increase due to changes in governmental regulations, safety or other equipment standards. If we are unable to fund our capital expenditures, we may not be able to continue to operate some of our vessels which would have a material adverse effect on our business, results of operations and cash flow. A decline in demand for refined petroleum, petrochemical and commodity chemical products, or decreases in U.S. refining activity, particularly in the coastal regions of the United States, or a decrease in the cost of importing refined petroleum products, could cause demand for U.S. flag tank vessel capacity and charter rates and vessel values to decline which would decrease our revenues and our cash flow. The current economic situation could adversely affect the collectability of our trade receivables. Marine transportation has inherent operating risks and our insurance may not be adequate to cover our losses. Because we obtain some of our insurance through protection and indemnity associations, we may be subject to calls or premiums in amounts based not only on our own claim records, but also the claim records of all other members of the protection and indemnity associations. Decreased utilization of our vessels due to bad weather could have a material adverse effect on our operating results and financial condition. An increase in the price of fuel may adversely affect our business and results of operations. We rely on a limited number of customers for a significant portion of our revenues. The loss of any of these customers could adversely affect our business and operating results. We may not be able to renew our long-term contracts when they expire or obtain contracts for the vessels we have under construction which could adversely affect our operations. Industry trends away from long-term charters in favor of shorter-term charters may impact our ability to finance newly built vessels. We have a limited number of vessels and any loss of use of a vessel could adversely affect our results of operations. Maritime claimants could arrest our vessels which could interrupt our cash flow. Increased competition in the domestic tank vessel industry could result in reduced revenue and EBITDA and loss of customers and market share for us. Our vessels, particularly our ITBs, may be limited from international transportation of petroleum products due to international regulations similar to OPA 90. This may limit the overseas opportunities of our vessels. Delays or cost overruns in the construction of a new vessel or the drydock maintenance of existing vessels could adversely affect our business. Revenue from new or retrofitted vessels may not be immediate or as high as expected. The growth of our business will be adversely affected due to the termination of our right to manage the vessels constructed by the Joint Venture. We are subject to complex laws and regulations, including environmental regulations, which can adversely affect the cost, manner or feasibility of doing business and which may affect our ability to sell, lease, charter or otherwise transfer our vessels. We depend upon unionized labor for the provision of our services. Any work stoppages or labor disturbances could disrupt our business. Our employees are covered by federal laws that may subject us to job-related claims in addition to those provided by state laws. We depend on key personnel for the success of our business and one of those persons faces conflicts in the allocation of his time to our business. Terrorist attacks have resulted in increased costs and any new attacks could disrupt our business. Changes in international trade agreements could affect our ability to provide marine transportation services at competitive rates. Our partnership agreement limits our general partner s fiduciary duties to unitholders and restricts the remedies available to unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty. Our partnership agreement currently limits, and our new organizational documents will limit, the ownership of our equity securities by individuals or entities that are not U.S. citizens. This restriction could limit the liquidity of our common units. Unitholders may have liability to repay distributions that were wrongfully distributed to them. Tax gain or loss on the disposition of our common units could be different than expected.

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1299716--6/25/2009--U.S._Shipping_Partners_L.P.