<SUBMISSION>
<ACCESSION-NUMBER>0000919574-09-013642
<TYPE>4
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20090717
<FILING-DATE>20090720
<DATE-OF-FILING-DATE-CHANGE>20090720
<ISSUER>
<COMPANY-DATA>
<CONFORMED-NAME>VELOCITY EXPRESS CORP
<CIK>0001002902
<ASSIGNED-SIC>4513
<IRS-NUMBER>870355929
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0701
</COMPANY-DATA>
<BUSINESS-ADDRESS>
<STREET1>ONE MORNINGSIDE DRIVE NORTH
<STREET2>BUILDING B SUITE 300
<CITY>WESTPORT
<STATE>X1
<ZIP>06880
<PHONE>203-349-4160
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>ONE MORNINGSIDE DRIVE NORTH
<STREET2>BUILDING B SUITE 300
<CITY>WESTPORT
<STATE>X1
<ZIP>06880
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>UNITED SHIPPING & TECHNOLOGY INC
<DATE-CHANGED>19990512
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>U SHIP INC
<DATE-CHANGED>19960313
</FORMER-COMPANY>
</ISSUER>
<REPORTING-OWNER>
<OWNER-DATA>
<CONFORMED-NAME>Manatuck Hill Partners, LLC
<CIK>0001467902
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</OWNER-DATA>
<FILING-VALUES>
<FORM-TYPE>4
<ACT>34
<FILE-NUMBER>000-28452
<FILM-NUMBER>09953864
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1465 POST ROAD EAST
<CITY>WESTPORT
<STATE>CT
<ZIP>06880
<PHONE>203.418.4400
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1465 POST ROAD EAST
<CITY>WESTPORT
<STATE>CT
<ZIP>06880
</MAIL-ADDRESS>
</REPORTING-OWNER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>p1014948_ex.xml
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0303</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2009-07-17</periodOfReport>

    <notSubjectToSection16>1</notSubjectToSection16>

    <issuer>
        <issuerCik>0001002902</issuerCik>
        <issuerName>VELOCITY EXPRESS CORP</issuerName>
        <issuerTradingSymbol>VEXP</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001467902</rptOwnerCik>
            <rptOwnerName>Manatuck Hill Partners, LLC</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>1465 POST ROAD EAST</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>WESTPORT</rptOwnerCity>
            <rptOwnerState>CT</rptOwnerState>
            <rptOwnerZipCode>06880</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>1</isOther>
            <otherText>*See Footnote 1</otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Series M. Convertible Preferred Stock</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>0.15</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2009-07-17</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>570000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F4"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F2"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F2"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>90167</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>845795</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                    <footnoteId id="F3"/>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>Investment Adviser</value>
                    <footnoteId id="F1"/>
                </natureOfOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Manatuck Hill Partners, LLC (&quot;Manatuck&quot;) is an investment adviser acting on behalf of its clients' accounts.  Manatuck
 disclaims any obligation to file this report, and this report shall not be deemed an admission that Manatuck is subject to
 Section 16 of the Securities Exchange Act of 1934, as amended (the &quot;Exchange Act&quot;), with respect to the Issuer of such
 securities.</footnote>
        <footnote id="F2">The Series M Convertible Preferred Stock is convertible at any time, at the holder's election and has no expiration date.</footnote>
        <footnote id="F3">Manatuck disclaims beneficial ownership of these securities, and this report shall not be deemed an admission that Manatuck
 is, for the purposes of Section 16 of the Exchange Act or otherwise, the beneficial owner of such securities.</footnote>
        <footnote id="F4">The sale price for the derivative securities was $1.00 in the aggregate.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Manatuck Hill Partners, LLC, By: /s/ Tom Scalia, Chief Financial Officer</signatureName>
        <signatureDate>2009-07-20</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SUBMISSION>
