1999
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

  [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                   For the fiscal year ended December 31, 1999

                          Commission File Number 0-8664

                        Circle International Group, Inc.
                        --------------------------------
             (Exact name of registrant as specified in its charter)

             Delaware                                   94-1740320
  -------------------------------                    ----------------
  (State of other jurisdiction of                    (I.R.S. Employer
   incorporation or organization)                 Identification Number)

           260 Townsend Street
       San Francisco, California                          94107-1719
----------------------------------------                  ----------
(Address of principal executive offices)                  (Zip Code)


       Registrant's telephone number, including area code: (415) 978-0600

           Securities registered pursuant to Section 12(b) of the Act:
                                                 Name of each exchange
           Title of each class                    on which registered
           -------------------                    -------------------
                  None                                   None

             Securities registered pursuant to Section 12(g) of the Act:
                                 Title of each class
             -----------------------------------------------------------
                          Common Stock, $1.00 par value
           Rights to Purchase Series A Junior Participating Preferred Stock

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     At March 27, 2000, the aggregate  market value of the  registrant's  Common
Stock held by non-affiliates of the registrant was approximately $403,454,315.
     At March 27, 2000, the number of shares outstanding of registrant's  Common
Stock was 17,597,932.

DOCUMENTS INCORPORATED BY REFERENCE

     Proxy Statement dated April 1, 2000 - Part III of this Form 10-K (Items 10,
11, 12 and 13).
     The Exhibit Index is located on pages 17 through 18 hereof.


<PAGE>


                                     PART I

ITEM 1  -  BUSINESS

General

Circle  International  Group,  Inc. and  subsidiaries  ("Circle") is a leader in
providing transportation and integrated logistics services for the international
movement of goods and the furnishing of value-added  information,  distribution,
and inventory management services to customers worldwide.  Circle is principally
engaged in international air and ocean freight forwarding, customs brokerage and
logistics. Circle provides value-added services in addition to those customarily
provided by traditional  air freight  forwarders,  ocean freight  forwarders and
customs  brokers.  These  services  are  designed  to provide  global  logistics
solutions for customers in order to streamline their supply chain,  reduce their
inventories,  improve their logistics  information,  enhance their profitability
and provide them with more  efficient and effective  international  distribution
strategies.

Circle's  global  array of  services  benefits  customers  by  reducing  overall
international  logistics  costs and increasing the speed and  reliability of the
delivery of goods worldwide.  These services  include:  air and ocean export and
import freight transportation;  worldwide customs brokerage, duty drawback, Free
Trade Zone management and associated  services;  global freight tracking;  other
information  management  services such as electronic data  interchange  ("EDI"),
electronic  invoicing  and  purchase  order  management;  logistics  management;
warehousing  and  distribution  services;  inventory and  materials  management;
protective cargo packing; bonded warehousing;  project cargo management;  global
purchasing  and trade  finance  services;  and marine  insurance  (ocean and air
coverage).

Circle's global  services are supplied  through its network of over 300 offices,
agents and distribution centers located in over 100 countries on six continents.
These  facilities  are  linked by  Circle's  real-time,  on-line  communications
network  that speeds the two-way  flow of  shipment  data and related  logistics
information  between origins and  destinations  around the world. In addition to
its  own   operations,   Circle  utilizes  a  network  of  overseas  agents  for
comprehensive, global coverage of major trade centers.

Circle commenced  operations in 1898, was incorporated in California in 1970 and
reincorporated  in Delaware  in 1987.  Unless the  context  otherwise  requires,
references  to  Circle  include  Circle   International   Group,  Inc.  and  its
subsidiaries.

Certain information  regarding Circle's operations by geographic regions for the
three years in the period ended December 31, 1999, is included in Note 14 of the
Notes to Consolidated Financial Statements.

Description of Business

INTERNATIONAL AIR FREIGHT FORWARDING

Circle believes that it is one of the largest  forwarders of  international  air
freight in the United  States.  Circle's  air  freight  forwarding  and  related
logistics services include the following:  inland transportation of freight from
point  of  origin  to  distribution  center  or the  carrier's  cargo  terminal;
warehousing and inventory management;  cargo assembly; export packing and vendor
shipment  consolidation;  global freight  forwarding;  charter  arrangement  and
handling; electronic transmittal of logistics documentation; electronic purchase
order/shipment  tracking;  expedited document delivery to overseas  destinations
for customs clearance;  and procurement of cargo insurance.  Circle does not own
or  operate   aircraft,   which  management   believes  gives  Circle  increased
flexibility to tailor its services to customer requirements.

During 1999,  Circle's principal air freight forwarding  customers were shippers
of computer,  electronic and high  technology  equipment,  automotive  products,
machinery  and  machine  parts,  consumer  goods,   clothing,   pharmaceuticals,
chemicals and aerospace equipment.

The air  freight  forwarding  business  of  Circle is not  dependent  on any one
customer  or  industry.  Circle  provides  services  to global or  multinational
customers, as well as regional customers. No customer accounted for more than 5%
of Circle's net air freight forwarding revenue in 1999.


                                       2
<PAGE>

Indirect Air Carrier

As an indirect  air  carrier,  Circle  procures  shipments  from its  customers,
consolidates  shipments  bound  for a  particular  destination,  determines  the
routing,  selects the direct carrier (an airline) on which the  consolidated lot
is to move and tenders each  consolidated lot as a single shipment to the direct
carrier for transportation to a destination. At the destination,  Circle, or its
agent, receives the consolidated lot, breaks it into its component shipments and
distributes  the  individual  shipments to the  consignee.  During 1999,  Circle
derived  approximately  90% of its net air freight  forwarding  revenue from its
services as an indirect air carrier.

Circle's  rates are based on a per kilo charge that  decreases  within a certain
range as the weight of the shipment  increases.  Circle  ordinarily  charges the
shipper  a rate  less  than the rate that the  shipper  would be  charged  by an
airline.  The rates that airlines charge to forwarders and others also generally
decrease  as  the  weight  of  the  shipment  increases.  As  a  result  of  the
consolidation of its customers' shipments,  Circle generally obtains lower rates
per kilo from airlines  than the rates it charges its  customers for  individual
shipments.  This rate  differential  is the primary  source of Circle's  net air
freight forwarding  revenue.  Circle's practice is to make prompt adjustments in
its rates to match changes in airline rates.

As  part  of  its  services,  Circle  prepares  documentation  relating  to  the
international  movement of goods; provides handling,  packing and containerizing
services;  arranges  for the routing and tracing of  shipments  when  necessary;
provides physical breakbulk,  delivery and inland transportation  services;  and
arranges  for freight  insurance.  Another  source of  Circle's  net air freight
forwarding  revenue is the fees which Circle charges for services related to the
movement  of  goods,  that  include  computer-prepared  shipment  documentation;
expedited  delivery of air waybills,  packing lists,  commercial  invoices,  and
other documents; and electronic shipment tracking and tracing. Circle offers its
customers access to its global on-line computer  information system,  which is a
comprehensive source of vital information for its customers.

Airline Agent

As an authorized cargo sales agent of most airlines  worldwide,  Circle arranges
for the  transportation of individual  shipments and receives from the airline a
commission for arranging the shipment. In addition,  Circle provides the shipper
with  ancillary  services such as export  documentation  for which it receives a
separate  fee.  When  acting  in this  capacity,  Circle  does  not  consolidate
shipments or have  responsibility  for shipments once they have been tendered to
the airline.  Circle conducts its agency air freight forwarding  operations from
the same facilities as its indirect  carrier  operations,  and services the same
regions of the world.  During 1999, Circle derived  approximately 10% of its air
freight forwarding net revenue from its services as an airline agent.

INTERNATIONAL OCEAN FREIGHT FORWARDING

As a global ocean freight forwarder, Circle arranges for the shipment of freight
by ocean carriers and acts as the agent of the shipper or the importer. Circle's
ocean  freight   forwarding  and  related  logistics   services  include  inland
transportation from point of origin to distribution  facility or port of export,
cargo assembly, packing and consolidation,  warehousing,  electronic transmittal
of documentation and shipment tracking,  expedited document delivery,  pre-alert
consignee notification, and cargo insurance.

A number of Circle's  facilities provide  protective cargo packing,  crating and
specialized handling services for retail goods,  government-specification cargo,
consumer goods,  hazardous cargo,  heavy machinery and assemblies and perishable
cargo.  Other  facilities  are equipped to handle tons of equipment and material
from multiple  origins to overseas  "turn-key"  projects,  such as manufacturing
facilities or government installations.  Circle does not own or operate ships or
assume carrier  responsibility,  preferring to retain the  flexibility to tailor
logistics services and options to the customer's requirements.

Circle's  compensation  for its ocean  freight  forwarding  services  is derived
principally  from  commissions  paid by shipping  lines and from  forwarding and
documentation fees paid by its customers, who are either shippers or consignees.
In 1999,  approximately 36% of Circle's net ocean freight forwarding revenue was
attributable to commissions, forwarding fees and associated ancillary services.


                                       3
<PAGE>

Ocean Freight Consolidation

Circle's  global  operations as an indirect  ocean carrier or NVOCC  (non-vessel
operating  common  carrier)  are  similar in some  respects  to its air  freight
consolidation  operations.   Circle  procures  customer  freight,   consolidates
shipments bound for a particular  destination,  determines the routing,  selects
the ocean  carrier or charters a ship,  and tenders each  consolidated  lot as a
single  shipment to the direct  carrier  for  transportation  to a  distribution
point. As an NVOCC, Circle generally derives its revenue from the spread between
the rate charged to its customer  and the ocean  carrier's  charge to Circle for
carrying  the  shipment,  in addition to charging for other  ancillary  services
related  to the  movement  of the  freight.  Because  of the  volume of  freight
controlled and consolidated by Circle,  Circle is generally able to obtain lower
rates from ocean carriers than the rate the shipper would be able to procure. In
1999, this service and associated ancillary services  contributed  approximately
64% of Circle's ocean freight forwarding net revenue.

CUSTOMS BROKERAGE

Circle  functions  as a customs  broker with  respect to entries of freight into
approximately  55  major  destinations  in the  United  States  and in over  300
overseas destinations through its network of offices and agents.

In its  capacity  as a customs  broker,  Circle  prepares  and files all  formal
documentation  required for clearance through customs agencies,  obtains customs
bonds,  in many cases  facilitates the payment of import duties on behalf of the
importer,  arranges  for  payment of collect  freight  charges,  and assists the
importer in obtaining the best commodity  classifications  and in qualifying for
duty  drawback  refunds.   Circle's  customs  brokers  and  support  staff  have
substantial  knowledge  of the  complex  tariff  laws  and  customs  regulations
governing the payment of duty, as well as valuation and import  restrictions  in
their respective countries. Within the U.S., Circle employs a significant number
of personnel holding individual customs broker licenses.

Circle relies both on company-designed  and third-party  computer technology for
customs brokerage activities performed on behalf of its clients.  Circle employs
the Automated Brokerage Interface information system,  providing an on-line link
with the United States Customs  Service.  In several  global trading  centers in
addition to the United States, Circle's offices are connected  electronically to
customs  agencies for expedited  pre-clearance  of goods and centralized  import
management.  Such on-line interface with customs agencies speeds freight release
and provides  nationwide control of clearances at multiple ports and airports of
entry.

Circle  works with  importers  to design  cost-effective  import  programs  that
utilize Circle's  distribution and logistics  services and computer  technology.
Such  services  include  electronic  document  preparation,  routing  cargo from
overseas   origins  to  ports  and  airports  of  entry,   bonded   warehousing,
distribution  of the cleared cargo to inland  locations and duty  drawback.  For
consolidated shipments,  containers are devanned,  cargo is segregated according
to final  destination,  and goods are forwarded to final  destinations.  In many
U.S. and overseas  locations,  Circle's bonded  warehouses  enable  importers to
defer  payment of  customs  duties  and  coordinate  release of cargo with their
production or  distribution  schedules.  Goods are stored under Customs  Service
supervision  until the importer is ready to withdraw or re-export  them.  Circle
receives  storage  charges  for  these  in-transit  goods  and fees for  related
ancillary  services.  Circle  also offers  Free Trade Zone  management  and duty
drawback  services  to  provide  customers  with  additional  tools to  maintain
cost-effective import programs.

As a customs broker  operating in the United  States,  Circle is licensed by the
Treasury Department and regulated by the United States Customs Service. Circle's
fees for acting as a customs  broker in the United  States are not regulated and
Circle  does not have a fixed  fee  schedule  for  customs  brokerage  services.
Instead, its fees are generally based on the volume of business transacted for a
particular  customer,  and the type, number and complexity of services provided.
In addition to its fees,  Circle bills the importer for amounts which Circle has
paid on the importer's behalf,  including duties,  collect freight charges,  and
similar payments.

                                       4
<PAGE>

DISTRIBUTION AND MATERIALS MANAGEMENT SERVICES

Circle offers a full range of customized  distribution and materials  management
services in connection  with the  transportation  of cargo.  These  services are
provided in a number of Circle's owned and leased  logistics  facilities in many
locations  throughout the world.  During 1999,  Circle  continued its program of
improving  its  existing   facilities   and   constructing   new  warehouse  and
distribution  facilities to meet its customers' needs. Circle's distribution and
materials  management  services include  inventory  control,  order  processing,
import and export  freight  staging,  protective  and  specialized  packing  and
crating,   pick-and-pack   operations,   containerization,   consolidation   and
deconsolidation  and special handling for perishables,  hazardous  materials and
heavy-lift  equipment.  For import  shipments,  Circle provides bonded warehouse
services and, in certain  locations,  Free Trade Zone services.  These warehouse
and  distribution   services  complement  the  other  transportation   services,
including the information systems tools provided by Circle that form part of the
integrated logistics solutions Circle offers to its customers.

INSURANCE

Another  transportation  service  offered  to  customers  is  the  arranging  of
international marine insurance in connection with Circle's air freight and ocean
freight forwarding  operations.  Insurance coverage  frequently is tailored to a
customer's  shipping  program and is procured for the customer as a component of
Circle's  integrated  logistics.  Circle  also  arranges  for  surety  bonds for
importers as part of its customs brokerage activities.

GLOBAL PROJECTS

Circle has global  project  divisions in North America and the United Kingdom to
meet the  special  requirements  of global  project  management  and heavy  lift
movements.  In  addition  to  logistics  advice  and  traditional  ocean and air
transportation  services,  the project  divisions  provide  on-site  assistance,
vessel  chartering  services  and  consulting   regarding   large-scale  project
movements.

TRADE FACILITATION SERVICES

Circle's  wholly  owned   subsidiary,   Circle  Trade  Services,   Ltd.  (CTSL),
specializes  in providing  procurement,  financial and  distribution  management
services to Circle's multinational customers.  CTSL purchases both raw materials
for manufacturing  and finished goods for  distribution,  then coordinates their
global  deployment,  as directed by the  customer.  CTSL  delivers  its services
through  custom-designed  Vendor and  Distribution  Hub programs.  Through CTSL,
Circle is able to  seamlessly  coordinate a customer's  procurement,  logistics,
transportation and distribution activities within a single supply chain program.
This enables  Circle to optimize  customer  supply  chains by  streamlining  the
material,  information and financial  flows through  integration of the specific
supply chain processes and elimination of redundant transactions.

Competition and Business Conditions

Circle's   principal   businesses   are  directly   related  to  the  volume  of
international  trade,  particularly  trade  between the United  States and other
nations. In general, global trading is expanding as businesses increasingly seek
new sourcing  opportunities and penetrate  international  markets. The extent of
such trade is  influenced  by many  factors,  including  economic and  political
conditions in the United States and abroad,  changes in supply or  manufacturing
practices,  fuel  costs,  labor  conditions,  wars and  other  armed  conflicts,
currency  fluctuations  and United  States and foreign laws relating to tariffs,
trade  restrictions,  foreign  investments and taxation.  In both 1999 and 1998,
Circle's  business was impacted by global economic events,  particularly in Asia
and Latin America.  This was reflected  particularly in reduced exports from the
United States

In addition to competition from other freight forwarders and cargo sales agents,
Circle  encounters  competition  from direct  carriers  which  actively  solicit
freight from shippers and from integrated  transportation companies that operate
their  own  aircraft  and also  act as  carriers.  Other  transportation-related
businesses,  such as trucking and distribution companies,  have also entered the
logistics and freight  forwarding  market.  Significant  competition  comes from
large domestic and foreign firms with substantial capital resources,  offices in
multiple  global  locations,   a  broad  array  of  services  and  a  technology
infrastructure   which  provides   global  support  to  customers'   operations.
Globalization  has  contributed  to  increased  consolidation  in  the  industry
resulting in competition from larger multi-national firms. Further consolidation
in the industry is anticipated.

                                       5
<PAGE>

As a customs  broker  and ocean  freight  forwarder,  Circle  encounters  strong
competition  in  every  port in  which  it does  business.  Circle  has  customs
brokerage and ocean freight forwarding offices in most major United States ports
and  competes  with  large  domestic  and  foreign  firms,  as well as local and
regional firms.

Circle offers its customers  multiple  transportation  services,  in addition to
traditional  air and  ocean  freight  forwarding,  in  order  to meet all of the
logistics  requirements of its customers.  An extension of its array of multiple
services is Circle's  integrated  transportation  logistics  program under which
Circle offers a  comprehensive  program  designed to meet the  customer's  total
door-to-door transportation requirements.  This assists the customer in creating
more efficient global sourcing, financing, inventory management and distribution
and warehousing strategies. The value-added logistics capabilities which support
this  strategy use the full  spectrum of services  offered by Circle,  including
information  management,   materials  management,   protective  packing,  vendor
coordination and purchase order processing, ocean or air transportation, customs
brokerage, warehouse and distribution and global trade services. Circle's global
transportation  logistics  program  often  relies  on  the  integration  of  its
customers'  information systems with Circle's  information  systems,  frequently
using electronic data interchange ("EDI") and assigning Circle employees who are
dedicated exclusively to the customer's shipment management requirements.

Integrated  logistics and related value-added  services are, in part, a response
to the growing trend toward the  outsourcing  of key  distribution  functions by
businesses  requiring   international  logistics  services  and  to  competitive
pressures  which  have  reduced   traditional  freight  forwarding  and  customs
brokerage margins.

Marketing

Circle's worldwide  services are marketed primarily by senior executives,  local
and global  sales  professionals,  and over 450  country,  region,  division and
branch managers whose responsibilities  include business development.  This team
generally  interacts  with  transportation,   finance,  logistics,  shipping  or
purchasing departments of Circle's existing and potential customers. Their sales
efforts  are  supplemented  by  Circle's  agents in certain  foreign  commercial
centers in which Circle does not have an office.

In an effort  to  accelerate  top-line  revenue  growth,  Circle  embarked  on a
strategic initiative to expand the sales and marketing infrastructure during the
third  quarter  of  1998.  During  1999,  Circle  successfully   completed  this
initiative  by winning new  customers  and  increasing  business  with  existing
customers, versus growth through acquisitions. In conjunction with the sales and
marketing  expansion,  Circle  continues  to  invest  significant  resources  in
enhancing  its  information  systems  in order meet  their  customers'  changing
business needs and to promote productivity.  Many of the information  technology
enhancements,  such as the use of EDI  applications,  global shipment  tracking,
internet tracking, and document imaging, improve customer connectivity and serve
as important sales tools.

Employees

As of December 31, 1999, Circle had over 4,900 employees.

Executive Officers

Circle's executive officers are as follows:

      Name         Age               Position
      ----         ---               --------
David I. Beatson    52    Chairman of the Board, President and Chief Executive
                          Officer
Janice Kerti        51    Senior Vice President, Chief Financial Officer and
                          Treasurer
Cynthia A. Stoddard 43    Senior Vice President and Chief Information Officer
Robert H. Kennis    47    Senior Vice President, Secretary and General Counsel
Stephen J. Russell  47    Senior Vice President, Sales and Marketing
Rae Fawcett         50    Senior Vice President, Human Resources and Quality


                                       6
<PAGE>

Mr.  Beatson  joined Circle in July 1998 as its  President  and Chief  Executive
Officer.  In January 1999, Mr.  Beatson  assumed the position of Chairman of the
Board of  Directors.  From July 1994 to July 1998,  he served as  President  and
Chief Executive Officer of the Emery Worldwide subsidiary of CNF Transportation,
Inc. Mr. Beatson was employed by CNF  Transportation,  Inc. for approximately 16
years.

Ms. Kerti  joined  Circle in September  1996 as Senior Vice  President,  Western
Division. From June 1997 to May 1998, she was Corporate Controller. In May 1998,
Ms. Kerti assumed the position of Chief Financial  Officer and Treasurer.  Prior
to 1996, Ms. Kerti served as Finance Director for MSAS Cargo International, Ltd.
and as Managing Director of its South Pacific Operations.

Ms.  Stoddard  joined Circle in September  1998 as its Senior Vice President and
Chief Information Officer,  responsible for managing Circle's global information
technology and communications  systems.  From June 1997 to July 1998, she served
as Vice President,  Information  Services for the Emery Worldwide  subsidiary of
CNF Transportation Inc. Prior to June 1997 she served as Director of Information
Systems for Emery.

Mr. Kennis joined Circle in 1989. He serves as Senior Vice President,  Secretary
and  General  Counsel  and is Circle's  Chief  Legal  Officer.  Prior to joining
Circle,  he was Vice  President and Legal Counsel for The  Consolidated  Capital
Companies  for  four  years.  From  1978 to  1984,  he was  with the law firm of
Bronson, Bronson & McKinnon as an associate and first-level partner.

Mr. Russell joined Circle in July 1998,  following Circle's acquisition of Alrod
International, Inc., where he was a shareholder and Executive Vice President for
18 years. He initially  joined Circle as Senior Vice President,  Sales,  Western
Division  and in October  1998 he assumed  his  current  position as Senior Vice
President, Sales and Marketing.

Ms.  Fawcett  joined  Circle  in  January  1977 and has  occupied  a  number  of
management positions. In January 1991 she was appointed Vice President, Quality,
responsible for Circle achieving its ISO 9002  certification.  She presently has
responsibility for managing Circle's Human Resources and Quality functions.


ITEM 2  -  PROPERTIES

The  properties  used  in  Circle's  domestic  and  foreign  operations  consist
principally  of air and ocean  freight  forwarding  offices,  customs  brokerage
offices and warehouse and distribution facilities. In the United States, freight
forwarding  operations and customs brokerage offices are conducted from the same
facility.  Circle's foreign offices are principally engaged in customs brokerage
and  ocean  and  air  freight  forwarding.  Additionally,  other  transportation
management services such as warehousing, distribution, packing, containerization
and other specialized services are offered at many offices.

The  following  table sets forth  certain  information  as of December  31, 1999
concerning  Circle's  domestic  and  foreign  facilities  and  freight  handling
terminals.

                       Number of Facilities
                    Owned      Leased    Total
Domestic              10         56        66
Foreign               28        162       190
                   --------  --------  --------
Total                 38        218       256
                   ========  ========  ========

Circle owns its headquarters building in San Francisco.

Under many of its leases,  Circle is responsible  for payment of property taxes,
maintenance and insurance in addition to rental payments. In 1999, the aggregate
rental expense for all of Circle's  leased  facilities was  approximately  $21.6
million.

For further information concerning Circle's lease commitments, see Note 6 of the
Notes to Consolidated Financial Statements.


                                       7
<PAGE>

ITEM 3  -  LEGAL PROCEEDINGS

Circle  is party to  routine  litigation  incident  to its  business,  primarily
relating to claims for goods lost or damaged in transit or  improperly  shipped.
Certain  lawsuits to which  Circle is a party are covered by  insurance  and are
being defended by Circle's insurance carriers.  Circle has established  reserves
and it is  management's  opinion that the resolution of such litigation will not
have a material  adverse effect on Circle's  consolidated  financial  statements
taken as a whole.

ITEM 4  -  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

                                     PART II

ITEM 5  -  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
           MATTERS

Circle's  common  stock is traded over the counter  under the symbol  CRCL.  The
following  table sets forth the  closing  prices in the NASDAQ  national  market
system for Circle's common stock for the calendar periods indicated, as reported
by NASDAQ.

                        High       Low
                        ----       ---
1999
Fourth Quarter         $25.63    $19.00
Third Quarter           26.00     20.00
Second Quarter          22.00     14.50
First Quarter           19.63     14.56

1998
Fourth Quarter         $21.38    $13.50
Third Quarter           28.56     14.00
Second Quarter          29.00     23.13
First Quarter           29.50     21.00

As of February 15, 2000, the  approximate  number of  stockholders  of record of
Circle's common stock,  excluding stockholders whose stock is held as nominee or
in street name by brokers, was 364.

Dividends Declared

Dividends declared per common share during 1999 and 1998 were:

                   1999                      1998
                  ------                    ------
June 30           $0.135   June 29          $0.135
December 30        0.135   December 14       0.135

The Board of Directors  considers  payment of cash  dividends  on a  semi-annual
basis subject to the availability of earnings, the financial condition of Circle
and other relevant factors.


                                       8
<PAGE>

ITEM 6  - SELECTED FINANCIAL DATA


<TABLE>
<CAPTION>

                                CIRCLE INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
                                -------------------------------------------------
                              (in thousands except per share and employee amounts)


                                                            Year Ended December 31,

                                   1999             1998             1997             1996             1995
                                   ----             ----             ----             ----             ----
<S>                         <C>         <C>  <C>         <C>  <C>         <C>  <C>         <C>  <C>         <C>
Revenue:
Air freight forwarding      $ 528,698   65%  $ 482,701   66%  $ 471,563   66%  $ 418,506   65%  $ 378,900   65%
Ocean freight forwarding      130,478   16%    111,938   15%    111,200   15%    106,554   16%     96,921   17%
Customs brokerage and other   154,901   19%    143,039   19%    134,226   19%    120,570   19%    104,812   18%
                            ---------------  ---------------  ---------------  ---------------  ---------------
    Total                   $ 814,077  100%  $ 737,678  100%  $ 716,989  100%  $ 645,630  100%  $ 580,633  100%
                            ===============  ===============  ===============  ===============  ===============


Net Revenue:
Air freight forwarding      $ 130,065   39%  $ 118,170   39%  $ 106,210   38%  $ 102,105   39%  $  94,573   41%
Ocean freight forwarding       47,026   14%     40,471   13%     37,608   14%     35,783   14%     32,238   14%
Customs brokerage and other   154,901   47%    143,039   48%    134,226   48%    120,570   47%    104,812   45%
                            ---------------  ---------------  ---------------  ---------------  ---------------
    Total                   $ 331,992  100%  $ 301,680  100%  $ 278,044  100%  $ 258,458  100%  $ 231,623  100%
                            ===============  ===============  ===============  ===============  ===============


Income from
    operations (1)           $ 27,213         $ 23,829         $ 32,373         $ 29,711         $ 26,496
Net income (1)                 23,212           18,515           26,332           21,717           18,159
Net income per share: (1)
    Basic                        1.35             1.09             1.57             1.30             1.08
    Diluted                      1.34             1.07             1.53             1.28             1.07
Dividends declared
    per share                    0.27             0.27             0.27             0.24             0.22
 Weighted average shares
     outstanding:
       Basic                   17,213           17,040           16,823           16,671           16,791
       Diluted                 17,365           17,260           17,191           16,926           17,026

At December 31,
Working capital             $ 107,911         $ 93,428        $ 100,271         $ 73,570         $ 73,650
Total assets                  545,392          493,729          434,399          409,253          348,256
Long-term obligations          35,883           21,558           27,702           29,014           30,183
Stockholders' equity          240,975          219,712          200,972          182,777          166,387
Number of employees             4,970            4,600            4,160            3,780            3,360

<FN>
(1) 1998 includes special charges of $10.7 million, or $8.1 million, net of tax ($0.47 per diluted share).
</FN>
</TABLE>

                                       9
<PAGE>

ITEM 7  -  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

The following discussion contains certain forward-looking  statements reflecting
Circle's  current   expectations   that  are  dependent  on  certain  risks  and
uncertainties  including  but  not  limited  to such  factors  as  economic  and
political  conditions around the world,  international  laws,  currency exchange
rates,  the  effect of  Circle's  accounting  policies  and other  risk  factors
detailed  herein.  There  can  be no  assurances  that  Circle's  actual  future
performance will meet such expectations. There may also be important, unforeseen
risks not described herein.

Results of Operations

1999 versus 1998

Revenue  increased 10% to $814.1 million compared to $737.7 million for 1998 due
to increases in air freight forwarding and ocean freight forwarding revenue. Net
revenue,  which  represents  revenue  less  freight  consolidation  costs,  also
increased 10% to $332.0 million compared to $301.7 million in 1998. Both revenue
and net revenue growth benefited from  acquisitions  completed during the second
half of 1998.

Air freight  forwarding  revenue  increased  10% or $46.0 million over 1998 as a
result of volume increases in Asia Pacific and Europe. Asia Pacific continues to
be our fastest  growing  region for this  product line and  contributed  a major
portion of the overall increase. These increases were partially offset by volume
reductions  in North  America  mainly due to decreased  export  activity to Asia
Pacific.  Air freight  forwarding  net revenue  increased 10% or $11.9  million.
North America's  volume  reductions were offset by an increase in the yield, due
to lower carrier costs.

Ocean freight forwarding revenue increased 17% or $18.5 million over 1998, while
ocean  freight  forwarding  net  revenue  increased  16% or  $6.6  million.  The
increases were principally due to volume increases in Asia Pacific and Europe.

Customs   brokerage  and  other  net  revenue,   which   includes   warehousing,
distribution  and  other  logistics  services,  increased  8% or $11.9  million.
Customs  brokerage  revenues  increased due to increased inbound traffic in Asia
Pacific and North America.  Warehousing and distribution  revenues  increased in
Europe and Asia Pacific,  and were partially offset by declines in North America
due to volume decreases from certain customers.

Salaries and related costs  increased 10% or $15.0  million.  As a percentage of
net revenue,  salaries and related costs were 52.2% in 1999 compared to 52.5% in
1998.  Operating,  selling and  administrative  expenses  increased 10% or $11.9
million.  During 1999, salaries and related costs as well as operating,  selling
and administrative  expenses were affected by Y2K preparedness  expenses and the
impact of two  strategic  initiatives  that Circle  embarked on during the later
part of 1998.  These  initiatives,  which  took the form of sales and  marketing
expansion activities and information technology  enhancements,  amounted to $5.2
million or 35% of the $15.0  million  salary and related cost  increase and $3.1
million of the increase in operating,  selling and administrative expenses. Also
during 1999, Y2K expenses totaled $8.8 million.

Total other income,  net, increased $1.7 million due primarily to a $4.5 million
gain on the sale of securities  further  discussed in Note 4 to the consolidated
financial  statements  and a $0.8  million  gain on the sale of our New  Zealand
perishables business. These gains were offset primarily by $2.8 million of lower
interest  income,  net.  The decrease in interest  income,  net,  resulted  from
reduced  short-term  investments that were liquidated to fuel expansion activity
in 1998 and higher interest expense from increased borrowings in 1999.

The  effective  income  tax rate for 1999 was  36.5%  compared  to 41.1% for the
comparable period in 1998. The 1998 effective tax rate was adversely impacted by
the  special  charges  discussed  in  Note  2  to  the  consolidated   financial
statements. The effective tax rate for 1998 excluding special charges was 36.8%.
Circle's effective tax rate fluctuates  primarily due to changes in the level of
pre-tax income in foreign countries which have different rates.


                                       10
<PAGE>

1998 versus 1997

Revenue  in 1998  increased  by $20.7  million or 3% over  1997.  This  increase
included a negative impact from foreign exchange of approximately  $50.9 million
resulting  from  converting  foreign  currency  into U.S.  dollars for financial
reporting  purposes.  Net revenue in 1998  increased by $23.6 million or 9% over
1997 and included a negative impact from foreign exchange of approximately $13.1
million.

Air freight  forwarding  revenue increased by $11.1 million or 2% over 1997 as a
result of revenue  increases in Asia  Pacific and Europe  where  Circle  handled
higher kilo volumes and an increased  number of shipments.  These increases were
partially  offset by revenue  reductions in North  America where Circle  handled
less kilo volume and a reduced number of shipments due primarily to decreases in
export activity to Asia Pacific. Air freight forwarding net revenue increased by
$12.0  million or 11% over 1997 as a result of  improved  margins in all regions
and increased shipment volume in Europe and Asia Pacific. In North America,  net
revenue  declined  due  to  lower  air  freight  revenue.   This  reduction  was
substantially  offset by more effective  purchasing of transportation  services.
Although the result was lower net revenue,  margins in North America improved by
two percentage points.

Ocean freight  forwarding revenue increased by $0.7 million or 1% over 1997 as a
result of increased  revenue and shipments in Asia Pacific and Europe.  Circle's
North America operations  experienced lower volumes as well as a shift of export
activity  from Asia Pacific to other parts of the world,  resulting in a revenue
decrease.  Ocean freight  forwarding net revenue increased by $2.9 million or 8%
over 1997 as a result of  increased  shipments  and revenue in Asia  Pacific and
Europe. Net revenue grew at a faster rate than revenue due to improved margins.

Customs brokerage and other revenue,  which includes  warehousing,  distribution
and other logistics services, increased 7%, or $8.8 million over 1997. In Europe
there was higher import  activity,  which was  partially  offset by lower import
activity in Asia  Pacific  due to weakened  local  currencies.  Warehousing  and
distribution,  and other revenue  increased in Europe,  North America,  and Asia
Pacific over the same period last year.

Salaries and related  costs  increased  7.1% or $10.5 million  principally  as a
result  of  hiring  more  employees  to serve new  customers  and to  accelerate
business growth.  Salaries as a percentage of net revenues dropped from 53.2% to
52.5%.

Operating,  selling, and administrative expenses increased 22% or $21.7 million.
This  increase  included  $10.7  million  of special  charges  related to merger
integration  costs for Alrod  International,  Inc.,  the  write-off  of  certain
receivables at Circle Trade  Services,  certain charges related to Latin America
operations,  facility  consolidation,  the write-down of information  technology
assets and employee  severance  costs.  The remaining $11.0 million increase was
mainly due to an increase in occupancy  costs related to additional  warehousing
and  distribution  facilities  as well as an increase in  professional  fees and
depreciation  related to the upgrading of computer systems and relocation of the
information technology group supporting the North America operations. There were
also higher  communication  costs across all regions,  due to a higher volume of
transactions.

Other income, net, decreased $0.9 million. Income from affiliates decreased $1.9
million  primarily  due to the effect of the  downturn in the Latin  America and
Asia Pacific economies on Circle's automotive logistics affiliate.  The increase
in interest,  net, of $1.3 million was attributable to income on IRS tax refunds
and to a reduction in Circle's debt levels.

The effective income tax rate for 1998 was 41.1% compared to 35.6% for 1997. The
effective  tax benefit from the special  charges was 24.1%.  This resulted in an
overall  increase in the tax rate for the year.  The effective tax rate for 1998
excluding the special  charges was 36.8%.  The increase from 1997 is a result of
the 1997 favorable resolution of IRS audits of the years 1986 through 1992.


                                       11
<PAGE>

Liquidity and Capital Resources

Circle  makes   significant   disbursements  on  behalf  of  its  customers  for
transportation  costs and customs  duties.  The billings to customers  for these
disbursements,  which are several  times the amount of revenue and fees  derived
from these  transactions,  are not  recorded  as revenue and expense on Circle's
income statement;  rather,  they are reflected in Circle's trade receivables and
trade payables.

1999 versus 1998

Net cash provided by operating activities was $8.3 million for 1999, compared to
$38.3 million in 1998.  The decrease in 1999 was primarily due to an increase in
net working  capital.  Net working capital  increased $26.8 million during 1999,
principally  due  to  expansion  activities  and  the  timing  of  receipts  and
disbursements.  During 1999,  a  substantial  portion of the revenue  growth was
generated in Europe and Asia where credit  terms are  traditionally  longer than
those customarily granted in the US.

Cash used in investing  activities for 1999, was $22.3 million  compared to $3.9
million in 1998.  Circle incurred  capital  expenditures of $28.5 million during
1999. These expenditures were mainly due to information  technology  initiatives
and general facilities  expansion in Europe and Asia Pacific.  Proceeds from the
sale of equity securities includes the $4.5 million gain on sale of Equant N. V.
securities further discussed in Note 4 to the consolidated financial statements.
During  1998,  Circle  liquidated  approximately  $20.3  million  of  short-term
investments to fund acquisitions.

Cash  provided by financing  activities  for 1999 was $9.8  million  versus $9.0
million  used  in  financing  activities  last  year.  Long-term  notes  payable
increased $10.7 million due primarily to a $11.0 million  increase of commercial
paper issued and outstanding.  Commercial  paper  outstanding as of December 31,
1999 was $25.0 million  compared to $14.0  million as of December 31, 1998.  The
semi-annual  dividends  of $0.135 per share  declared in December  1998 and June
1999 totaling  $4.6 million were paid in 1999. A semi-annual  dividend of $0.135
per share was also  declared in December  1999 and will be paid during the first
quarter of 2000.  Proceeds from the exercise of stock  options  amounted to $4.5
million in 1999 compared to $2.0 million in 1998.

At December 31, 1999, Circle had available  borrowing capacity of $19.0 million.
Management  believes  that  operating  cash flows,  Circle's  current  financial
structure  and  borrowing  capacity  will be  adequate  to fund its  operations,
finance capital expenditures and acquisitions, and pay dividends to stockholders
over the coming year.

1998 versus 1997

Net cash  provided by  operations  increased to $38.3 million for the year ended
December 31, 1998,  from $34.2 million in 1997. Net working  capital at December
31, 1998, was $93.4 million compared to $100.3 million at December 31, 1997. The
decrease is  primarily  due to the timing of  receipts  and  disbursements.  The
fluctuations in individual components are largely due to 1998 acquisitions.

Cash used in investing  activities decreased to $3.9 million in 1998 compared to
$37.4 million in 1997  primarily due to proceeds  from sales of  investments  of
$20.3 million in 1998  compared to purchases of $27.6  million in 1997.  Capital
expenditures  during 1998 were $13.0 million.  In addition,  in 1998 Circle used
cash of $13.2 million to acquire businesses.

Cash used in financing  activities for 1998 was $9.0 million versus $6.0 million
last year. Commercial paper decreased by $11.0 million, from $25.0 million as of
December 31, 1997,  to $14.0 million as of December 31, 1998.  Short-term  notes
payable  increased $5.0 million during 1998 compared to a $4.9 million  decrease
in 1997.  The  increase in 1998 was  primarily  attributable  to a $5.8  million
overnight loan at year-end 1998 to cover Circle's daily cash position at certain
locations.  The  semi-annual  dividend of $0.135 per share  declared in December
1997 was paid in the  first  quarter  of 1998 for a total of $2.2  million.  The
Board of Directors  declared a semi-annual  cash dividend of $0.135 per share on
June 29, 1998.  This dividend of $2.3 million was paid on September 15, 1998, to
shareholders  of record on August 14, 1998.  Proceeds from the exercise of stock
options amounted to $2.0 million in 1998 compared to $4.4 million in 1997.


                                       12
<PAGE>

New Accounting Pronouncements

See Note 1 of the Notes to Consolidated  Financial  Statements for a description
of new accounting pronouncements.

YEAR 2000

Circle did not encounter  any material  problems  associated  with the Year 2000
rollover  with  any of  its  internally  developed  or  vendor-supplied  mission
critical systems,  services or products.  Mission critical systems, services and
products are defined as those  systems,  services  and products  critical to the
ongoing  operation of the business.  Data exchanges and  communications  between
Circle  offices and business  partners,  government  agencies and customers were
initiated successfully following the century change.

Circle  funded all Year 2000 related  costs  through  operating  cash flows from
operations  and all Year 2000  expenditures  were expensed as incurred.  For the
three and twelve months ended  December 31, 1999,  Circle spent $0.8 million and
$8.8  million,  respectively,  in costs  specifically  directed to the Year 2000
remediation.  An  additional  $0.7  million is  estimated to be spent during the
first half of 2000 for staffing the Year 2000 project  management office and for
finalizing system remediation not completed at year-end.

The Year 2000 project  management  office will  continue to monitor and validate
its mission critical  systems,  finalize Year 2000 non-mission  critical related
issues and resolve any other Year 2000 related business problems that may arise.
However,  Circle  does  not  anticipate  encountering  any  material  Year  2000
problems.

EURO CONVERSION

Circle is engaged in various efforts  worldwide  related to the  introduction in
January  1999 of the  European  single  currency  known  as the  euro.  The euro
conversion did not have a material impact on the competitiveness of its services
in Europe.  Circle's current accounting systems handled the euro conversion with
minimal  intervention and did not experience material adverse  consequences as a
result of the  conversion.  The internal and external  costs incurred to address
the euro conversion did not have a material impact on the operations, cash flows
or financial condition of Circle.

ITEM 7A  -  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Discussion

Circle's cash flows and net income are subject to fluctuations due to changes in
exchange  rates.  Circle  attempts to limit its  exposure  to  changing  foreign
exchange rates through both  operational and financial  market  actions.  Circle
provides  services to  customers  in  locations  throughout  the world and, as a
result, operates with many functional currencies including the key currencies of
North America,  Latin America,  Asia, the South Pacific and Europe. This diverse
base of local  currency costs serves to partially  counterbalance  the effect of
potential changes in the value of Circle's local currency  denominated  revenues
and expenses.

Short-term  exposures to changing  foreign  currency  exchange rates are related
primarily  to  intercompany  transactions.  The  duration of these  exposures is
minimized through the use of an intercompany  netting and settlement system that
settles  the  majority  of  intercompany  obligations  two times per  month.  In
addition,  certain exposures are managed by financial market transactions in the
form of forward foreign exchange contracts  (typically with maturities of twelve
months or less).  Forward foreign exchange contracts are denominated in the same
currency as the receivable or payable being covered, and the term of the forward
foreign  exchange  contract  matches the term of the  underlying  receivable  or
payable.  Circle covers known and measurable  exposed  receivables  and payables
denominated in currencies  that have a liquid,  cost-effective  forward  foreign
exchange market, and that are of sufficient size to warrant such coverage.

The  receivables  and payables  being covered arise from trade and  intercompany
loans and transactions of and among Circle's operating and other business units.

Circle  does not hedge its  foreign  currency  exposure  in a manner  that would
entirely  eliminate the effects of changes in foreign exchange rates on Circle's
consolidated net income.

                                       13
<PAGE>

Circle is subject to changing interest rates because its debt consists primarily
of short-term  commercial paper.  Circle does not undertake any specific actions
to cover its  exposure  to  interest  rate risk and Circle is not a party to any
interest rate risk management transactions. Circle does not purchase or hold any
derivative financial instruments for trading purposes.

Exchange Rate Sensitivity

Circle's use of derivative  financial  instruments is limited to forward foreign
exchange contracts.  At December 31, 1999, the nominal value of all open forward
foreign  exchange   contracts  was  $0.6  million  related  to  one  transaction
denominated in British pounds. A 10%  appreciation or 10%  depreciation  against
the U.S.  dollar  of any or all of the  underlying  currencies  would not have a
material effect on Circle's net income.

The   following   tables   provide   comparable   information   about   Circle's
non-functional  currency  components  of balance  sheet items by  currency,  and
presents such  information in U.S.  dollar  equivalents at December 31, 1999 and
1998. These tables summarize  information on transactions  that are sensitive to
foreign currency exchange rates, including  non-functional  currency-denominated
receivables  and payables.  The net amount that is exposed to changes in foreign
currency  rates is then subjected to a 10% change in the value of the functional
currency versus the non-functional currency.




Non-Functional Currency Exposure in U.S. Dollar Equivalents
as of December 31, 1999 (in thousands):
                                                             Foreign Exchange
                                                              Gain/(Loss) if
                                                           Functional Currency
                                                         -----------------------
Non-Functional                             Net Exposure  Appreciates Depreciates
Currency               Asset    Liability  Long/(Short)    by 10%       by 10%
-------------------- --------- ----------- ------------- ----------- -----------
United States dollar $ 51,704    $ 35,934      $ 15,770     $ 1,577   $ (1,577)
European Union euro       215      3,092         (2,877)       (288)       288
Singaporean dollar         34      1,654         (1,620)       (162)       162
Japanese yen               13      1,518         (1,505)       (150)       150
Hong Kong dollar            -        412           (412)        (41)        41
Canadian dollar            13        400           (387)        (39)        39
Australian dollar         159        296           (137)        (14)        14
British pound              36        232           (196)        (20)        20
Taiwanese dollar            -        191           (191)        (19)        19
All others                 78        703           (625)        (62)        62
                     --------- ----------- ------------- ----------- -----------
TOTALS               $ 52,252    $ 44,432       $ 7,820     $   782   $   (782)
                     ========= =========== ============= =========== ===========


                                       14
<PAGE>

Non-Functional Currency Exposure in U.S. Dollar Equivalents
as of December 31, 1998 (in thousands):
                                                             Foreign Exchange
                                                              Gain/(Loss) if
                                                           Functional Currency
                                                         -----------------------
Non-Functional                             Net Exposure  Appreciates Depreciates
Currency               Asset    Liability  Long/(Short)    by 10%       by 10%
-------------------- --------- ----------- ------------- ----------- -----------
United States dollar $ 58,560    $ 24,061      $ 34,499    $ (3,450)  $  3,450
Swiss franc                99         988          (889)         89        (89)
Singaporean dollar        101         580          (479)         48        (48)
Irish punt                 17         422          (405)         41        (41)
German mark               131         530          (399)         40        (40)
Indian rupee                1         358          (357)         36        (36)
British pound              62         390          (328)         33        (33)
Italian lira               29         352          (323)         32        (32)
Dutch guilder               7         217          (210)         21        (21)
All others                887       1,701          (814)         81        (81)
                     --------- ----------- ------------- ----------- -----------
 Totals              $ 59,894    $ 29,599      $ 30,295    $ (3,029)  $  3,029
                     ========= =========== ============= =========== ===========

ITEM 8  -  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The  information  required by this item is set forth at the pages  indicated  in
Item 14(a) of this Form 10-K.

ITEM 9  -  CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE

None.

                                    PART III

ITEM 10  -  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The  information  required by this item is  incorporated  by reference  from the
sections of Circle's Proxy Statement  dated April 1, 2000 entitled  "Election of
Directors" and "Section 16(a) Information".  Also see "Executive Officers" under
Item 1 above.

ITEM 11  -  EXECUTIVE COMPENSATION

The  information  required by this item is  incorporated  by reference  from the
sections of Circle's Proxy Statement dated April 1, 2000 entitled  "Compensation
of Executive Officers", "Options Granted to Executive Officers", and "Employment
Agreements".

ITEM 12  -  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  required by this item is  incorporated  by reference  from the
section of Circle's Proxy Statement  dated April 1, 2000 entitled  "Ownership of
Management and Principal Stockholders".

ITEM 13  -  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required by this item is  incorporated  by reference  from the
sections of Circle's Proxy Statement dated April 1, 2000 entitled  "Transactions
with  the  Company"  and   "Compensation   Committee   Interlocks   and  Insider
Participation".


                                       15
<PAGE>

                                     PART IV

ITEM 14  -  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)   The following are filed as part of this report:

                                                                        PAGE
                                                                        ----
      (1) (2) Consolidated Financial Statements of Circle:

              Consolidated Income Statements for the years ended
              December 31, 1999, 1998 and 1997                           F-1

              Consolidated Balance Sheets, December 31, 1999 and 1998    F-2

              Consolidated Statements of Stockholders' Equity for the
              years ended December 31, 1999,1998, and 1997               F-3

              Consolidated Statements of Cash Flows for the years ended
              December 31, 1999, 1998, and 1997                          F-4

              Notes to Consolidated Financial Statements              F-5 - F-16

              Independent Auditors' Report                               F-17

      (3)     Exhibits: See the attached Exhibit Index on pages 17 and 18.

(b)   Form 8-K:

              No  reports  on  Form 8-K were  filed  during  the 3 months  ended
              December 31, 1999.

All other Schedules  required by Form 10K have been omitted because they are not
applicable,  are included in the notes to the consolidated financial statements,
or were otherwise not required under the requirements of Regulation S-X.


                                       16
<PAGE>

                                  EXHIBIT INDEX

EXHIBIT                                                                   PAGE
NUMBER     EXHIBIT                                                       NUMBER
------     -------                                                       ------

3.1        Certificate of  Incorporation  of the Harper Group,  Inc., a
           Delaware corporation.  (Incorporated by reference to Exhibit
           4.2 to Registration  Statement No. 33-40826 filed on May 24,
           1991.)

3.1.2      Certificate  of Amendment to  Certificate  of  Incorporation
           filed May 14,  1997.  (Incorporated  by reference to Exhibit
           3.1.2 to the  Annual  Report  on Form 10-K for  fiscal  year
           ended December 31, 1997.)

3.2        Registrant's by-laws, as amended. (Incorporated by reference
           to  Exhibit  3.2.1 to  Annual  Report  on Form  10-K for the
           fiscal year ended December 31, 1986, filed on or about March
           31, 1987.)

3.2.1      Amendments  to  Article  IV,  Sections   2,3,4,5  and  6  of
           Registrant's   by-laws,   effective  as  of  May  23,  1991.
           (Incorporated by reference to Exhibit 3.2.1 to Annual Report
           on Form 10-K for the fiscal year ended  December  31,  1991,
           filed on or about March 31, 1992.)

3.2.2      Sections 2 and 3 of Registrant's by-laws effective as of May
           31, 1992.  (Incorporated  by  reference to Exhibit  3.2.2 to
           Annual  Report  on Form  10-K  for  the  fiscal  year  ended
           December 31, 1992 filed on or about March 31, 1993.)

4.1        Specimen   certificate   of   Registrant's   Common   Stock.
           (Incorporated  by reference  to Exhibit 4.1 to  Registration
           Statement No. 2-59017, filed on May 16, 1977.)

4.2        Rights Agreement,  dated as of October 24, 1994, between The
           Harper Group, Inc. and Chemical Trust Company of California,
           which  includes  as  Exhibit A thereto  the  Certificate  of
           Designation,  Preferences  and  Rights  of  Series  A Junior
           Participating Preferred Stock, as Exhibit B thereto the Form
           of Rights  Certificate and as Exhibit C thereto a Summary of
           Rights to Purchase Common Stock.  (Incorporated by reference
           to the Form  8-A  Registration  Statement  filed on or about
           October 24, 1994.)

10.1       Agreement of Merger between Registrant and the Harper Group,
           a California corporation,  providing for the reincorporation
           of  Registrant  in Delaware.  (Incorporated  by reference to
           Exhibit A to  Registrant's  Proxy  Statement  dated April 1,
           1987, filed on or about April 10, 1987.)

10.2       Form of indemnity  agreement between  Registrant and each of
           its directors  (Incorporated by reference to Exhibit 10.3 to
           Annual  Report  on Form  10-K  for  the  fiscal  year  ended
           December 31, 1988, filed on or about March 31, 1989.)

10.3       Agreement and Plan of  Reorganization  dated as of April 23,
           1992, with exhibits attached,  including Registration Rights
           Agreement, Employment Agreement between Registrant and Peter
           Gibert  and  Indemnification  Agreement.   (Incorporated  by
           reference  to Exhibit  2.1.  to Current  Report on Form 8-K,
           dated May 21, 1991, filed on or about May 23, 1991.)

10.3.1     Amendments to May 1991 Employment  Agreement of Peter Gibert
           (Incorporated  by  reference  to  Exhibit  10.4.1  to Annual
           Report on Form 10-K for the fiscal year ended  December  31,
           1995.)*

10.3.2     Amendment dated October 27, 1997 to Employment  Agreement of
           Peter Gibert. (Incorporated by reference to Exhibit 3.1.2 to
           the  Annual  Report  on Form  10-K  for  fiscal  year  ended
           December 31, 1997.)*


                                       17
<PAGE>

10.3.3     Consulting  Agreement  dated  January 1, 1999  between  Zita
           Logistics,   Ltd.  and  Circle   International  Group,  Inc.
           (Incorporated by reference to Annual Report on Form 10-K for
           the fiscal  year  ended  December  31,  1998 and filed on or
           about March 31, 1999.)*

10.4       1990  Stock  Option  Plan.  (Incorporated  by  reference  to
           Exhibit  10.5 to Annual  Report on Form 10-K for the  fiscal
           year ended  December 31,  1992,  filed on or about March 31,
           1993.)*

10.5       Stock Option Plan for Non-Employee Directors.  (Incorporated
           by reference  to Exhibit 10.6 to Annual  Report on Form 10-K
           for the fiscal year ended  December  31,  1992,  filed on or
           about March 31, 1993.)*

10.6       Credit  Agreement dated October 15, 1993 between  Registrant
           and Bank of America National Trust and Savings  Association.
           (Incorporated  by reference to Pages 14-103 to Form 10-Q for
           the nine months ended September 30, 1993,  filed on or about
           November 10, 1993.)

10.7       1994  Omnibus  Equity   Incentive  Plan   (Incorporated   by
           reference to the Form S-8 Registration Statement filed on or
           about May 9, 1994.)*

10.7.1     Amendment  No.  1 to  1994  Omnibus  Equity  Incentive  Plan
           (Incorporated  by  reference  to  Exhibit  10.11.1 to Annual
           Report on Form  10-K for  fiscal  year  ended  December  31,
           1995.)

10.8       1995   Stock   Option   Plan  For   Non-Employee   Directors
           (Incorporated by reference to Exhibit 10.12 to Annual Report
           on Form 10-K for the fiscal year ended December 31, 1995.)*

10.9       Letter  Agreement dated May 4, 1998 between David I. Beatson
           and  Circle  International  Group,  Inc.   (Incorporated  by
           reference to Exhibit 10.12 to Annual Report on Form 10-K for
           the fiscal year ended December 31, 1998.)*

10.10      Letter  Agreement  dated July 31,  1998  between  Stephen J.    37
           Russell,   Circle   International   Group,  Inc.  and  Alrod
           International, Inc.*

10.11      Circle  International  Group Savings Plan  (Incorporated  by
           reference to the Form S-8 Registration Statement filed on or
           about September 24, 1998.)*

10.12      1999 Stock  Option Plan  (Incorporated  by  reference to the
           Form S-8  Registration  Statement  filed on or about May 19,
           1999.)*

10.13      Circle  International  Group,  Inc.  Employee Stock Purchase
           Plan (Incorporated by reference to the Form S-8 Registration
           Statement filed on or about May 19, 1999.)*

21.1       List of Subsidiaries                                            47

23.1       Consent of Deloitte & Touche LLP                                48

27         Financial Data Schedule                                         49


 *   Indicates,   as  required  by  Item  14(a)(3),  a  management  contract  or
     compensatory plan required to be filed as an exhibit to this Form 10-K.


                                       18
<PAGE>

                                   Signatures

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Date: March 29, 2000

CIRCLE INTERNATIONAL GROUP, INC.

By:  /S/ David I. Beatson
    ----------------------------------------------
     David I. Beatson
     Chairman of the Board, President and Chief Executive Officer

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated on March 29, 2000.

            Signature                     Title

     /S/    David I. Beatson          Chairman of the Board, President and Chief
------------------------------------- Executive Officer (Principal Executive
     (David I. Beatson)               Officer)

     /S/    Janice Kerti              Senior Vice President, Chief Financial
------------------------------------- Officer and Treasurer (Principal Financial
     (Janice Kerti)                   Officer and Principal Accounting Officer)

     /S/    Wesley J. Fastiff         Director
-------------------------------------
     (Wesley J. Fastiff)

     /S/    Peter Gibert              Director
-------------------------------------
     (Peter Gibert)

     /S/    Edwin J. Holman           Director
-------------------------------------
     (Edwin J. Holman)

     /S/    John M. Kaiser            Director
-------------------------------------
     (John M. Kaiser)

     /S/    Ray C. Robinson, Jr.      Director
-------------------------------------
     (Ray C. Robinson, Jr.)


                                       19
<PAGE>


                CIRCLE INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

                         CONSOLIDATED INCOME STATEMENTS
                    (in thousands, except per share amounts)

                                                    Year ended December 31,

                                                1999         1998         1997
                                                ----         ----         ----

Revenue                                     $ 814,077    $ 737,678    $ 716,989
Freight consolidation costs                   482,085      435,998      438,945
                                            ----------   ----------   ----------

Net revenue                                   331,992      301,680      278,044

Other costs and expenses:
    Salaries and related                      173,431      158,382      147,931
    Operating, selling and administrative      31,348      119,469       97,740
                                            ----------   ----------   ----------

Total other costs and expenses                304,779      277,851      245,671
                                            ----------   ----------   ----------

Income from operations                         27,213       23,829       32,373

Other income (expense):
    Interest income (expense), net               (304)       2,475        1,225
    Income from affiliates, net                 3,922        3,853        5,785
    Other, net                                  5,724        1,288        1,527
                                            ----------   ----------   ----------

    Total other income, net                     9,342        7,616        8,537
                                            ----------   ----------   ----------

Income before taxes                            36,555       31,445       40,910

Taxes on income                                13,343       12,930       14,578
                                            ----------   ----------   ----------

Net income                                   $ 23,212     $ 18,515     $ 26,332
                                            ==========   ==========   ==========

Net income per share:
    Basic                                      $ 1.35       $ 1.09       $ 1.57
                                            ==========   ==========   ==========
    Diluted                                    $ 1.34       $ 1.07       $ 1.53
                                            ==========   ==========   ==========

Weighted average common
shares outstanding:
    Basic                                      17,213       17,040       16,823
                                            ==========   ==========   ==========
    Diluted                                    17,365       17,260       17,191
                                            ==========   ==========   ==========

Dividends declared per share                   $ 0.27       $ 0.27       $ 0.27
                                            ==========   ==========   ==========



                 See Notes to Consolidated Financial Statements

                                       F-1

                                       20
<PAGE>

               CIRCLE INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except share amounts)

                                                                December 31,
                                                             1999         1998
                                                         ----------   ----------
ASSETS
Current assets:
     Cash and equivalents                                $  40,347    $  44,586
     Short-term investments                                 14,366       14,213
     Trade receivables, less allowance for doubtful
         accounts of: 1999, $7,835; 1998, $7,131           284,504      252,615
     Other receivables                                      10,415        7,765
     Other current assets                                    8,402        7,820
                                                         ----------   ----------
         Total current assets                              358,034      326,999

Property:
     Land                                                   15,258       15,161
     Buildings and improvements                             75,501       70,632
     Equipment and furniture                                96,048       78,204
                                                         ----------   ----------
         Total                                             186,807      163,997
     Less accumulated depreciation                         (83,953)     (75,809)
                                                         ----------   ----------
         Property, net                                     102,854       88,188


Equity securities                                              770          935
Investments in unconsolidated affiliates                    48,207       42,967
Goodwill, net                                               31,166       30,727
Other assets                                                 4,361        3,913
                                                         ----------   ----------
Total assets                                             $ 545,392    $ 493,729
                                                         ==========   ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Notes payable to banks                              $   7,801    $   7,869
     Trade payables                                        187,724      175,532
     Accrued salaries and related costs                     17,008       15,582
     Dividends payable                                       2,349        2,312
     Income taxes payable                                    8,161        7,292
     Other liabilities                                      27,350       24,984
                                                         ----------   ----------
         Total current liabilities                         250,393      233,571

Minority interests                                           5,809        4,546
Deferred income taxes                                       12,602       14,342
Capital lease obligation                                     3,369          -
Long-term notes payable                                     32,244       21,558
Commitments and contingencies                                  -            -

Stockholders' equity:
    Preferred stock, $1 par: shares
        authorized, 1,000,000; none issued                     -            -
    Common stock, $1 par: shares
        authorized, 40,000,000;
        shares issued and outstanding
        1999, 17,419,001; 1998, 17,131,994                  35,612       30,822
     Retained earnings                                     220,437      201,907
     Accumulated other comprehensive loss                  (15,074)     (13,017)
                                                         ----------   ----------
         Total stockholders' equity                        240,975      219,712
                                                         ----------   ----------
Total liabilities and stockholders' equity               $ 545,392    $ 493,729
                                                         ==========   ==========

                 See Notes to Consolidated Financial Statements

                                       F-2

                                       21
<PAGE>

<TABLE>
<CAPTION>

                                    CIRCLE INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

                                     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                           (in thousands, except share amounts)


                                  For the years ended December 31, 1999, 1998 and 1997


                                                                                                          Accumulated
                                                                                                             Other         Total
                                          Common Stock        Treasury Stock      Retained Comprehensive Comprehensive Stockholders'
                                          ------------        --------------
                                       Shares     Amount      Shares    Amount    Earnings     Income    Income (Loss)     Equity
                                     ----------- ---------  --------- ---------  ----------   ---------  -------------  ------------
<S>                                  <C>         <C>        <C>       <C>        <C>          <C>        <C>            <C>
Balance December 31, 1996            17,163,490  $ 22,683   (500,000) $ (8,947)  $ 174,201                  $ (5,160)     $ 182,777
    Comprehensive income:
      Net income                            -         -          -         -        26,332    $ 26,332           -           26,332
                                                                                              ---------
      Change in the value of
         marketable securities, net         -         -          -         -           -           398           398            398
      Foreign currency translation          -         -          -         -           -      ( 10,736)      (10,736)       (10,736)
                                                                                              ---------
      Other comprehensive loss                                                                ( 10,338)
                                                                                              ---------
    Comprehensive income                                                                      $ 15,994
                                                                                              =========
    Cash dividends ($.27 per share)         -         -          -         -        (4,363)                      -           (4,363)
    Issuance of stock for acquisition    32,958       785        -         -           -                         -              785
    Issuance of restricted stock         24,615       626        -         -           -                         -              626
    Exercise of stock options,
      including tax benefit             283,590     5,153        -         -           -                         -            5,153
    Retirement of treasury stock       (500,000)     (791)   500,000     8,947      (8,156)                      -              -
                                     ----------- ---------  --------- ---------  ----------                -----------    ----------
Balance December 31, 1997            17,004,653  $ 28,456        -    $    -     $ 188,014                 $ (15,498)     $ 200,972
    Comprehensive income:
      Net income                              -         -        -         -        18,515    $ 18,515           -           18,515
                                                                                              ---------
      Change in the value of
         marketable securities, net           -         -        -         -           -           (43)          (43)           (43)
      Foreign currency translation            -         -        -         -           -         2,524         2,524          2,524
                                                                                              ---------
      Other comprehensive income                                                                 2,481
                                                                                              ---------
    Comprehensive income                                                                      $ 20,996
                                                                                              =========
    Cash dividends ($.27 per share)           -         -        -         -        (4,622)                      -           (4,622)
    Issuance of restricted stock         13,942       172        -         -           -                         -              172
    Exercise of stock options,
      including tax benefit             113,399     2,194        -         -           -                         -            2,194
                                     ----------- ---------  --------- ---------  ----------                -----------    ----------
Balance December 31, 1998            17,131,994  $ 30,822        -    $    -     $ 201,907                 $ (13,017)     $ 219,712
    Comprehensive income:
      Net income                              -         -        -         -        23,212    $ 23,212           -           23,212
                                                                                              ---------
      Change in the value of
         marketable securities, net           -         -        -         -           -            39            39             39
      Foreign currency translation            -         -        -         -           -        (2,096)       (2,096)        (2,096)
                                                                                              ---------
      Other comprehensive loss                                                                  (2,057)
                                                                                              ---------
    Comprehensive income                                                                      $ 21,155
                                                                                              =========
    Cash dividends ($.27 per share)           -         -        -         -        (4,682)                      -           (4,682)
    Exercise of stock options,
      including tax benefit             287,007     4,790        -         -           -                         -            4,790
                                     ----------- ---------  --------- ---------  ----------                -----------    ----------
Balance December 31, 1999            17,419,001  $ 35,612        -    $    -     $ 220,437                 $ (15,074)     $ 240,975
                                     =========== =========  ========= =========  ==========                ===========    ==========

                                     See Notes to Consolidated Financial Statements
</TABLE>

                                       F-3

                                       22
<PAGE>

                CIRCLE INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (in thousands)

                                                      Year Ended December 31,

                                                    1999       1998       1997
                                                    ----       ----       ----
Operating activities:
    Net income                                   $ 23,212   $ 18,515   $ 26,332
    Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization                16,046     13,604     12,046
      Provision for doubtful accounts               5,898      4,232      5,050
      Deferred income taxes                        (2,043)     1,963      6,531
      Gains on sales of assets                     (5,228)      (271)      (613)
      Equity in earnings of affiliates, net of
       dividends received                          (3,156)    (2,229)    (5,785)
      Minority interests, net of dividends paid       338        928      1,286
      Other                                           (36)       171         (5)
      Net effect of changes in working capital
       Trade receivables                          (39,280)   (14,299)   (14,475)
       Other receivables                             (938)    (2,677)       788
       Other current assets                        (1,425)     3,822     (1,621)
       Trade payables                              12,634      4,875      4,113
       Other liabilities                            2,238      9,674        593

                                                 ---------  ---------  ---------
Net cash provided by operating activities           8,260     38,308     34,240
                                                 ---------  ---------  ---------

Investing activities:
    Proceeds from sales of assets                   4,301      1,527      1,468
    Proceeds from sales of equity securities        5,019        495      6,669
    Net proceeds from sales (purchases)
      of short-term investments                      (436)    20,281    (27,553)
    Capital expenditures                          (28,473)   (12,960)   (14,144)
    Acquisitions of businesses                     (2,725)   (13,229)    (3,731)
    Other                                               -         (3)      (101)
                                                 ---------  ---------  ---------
Net cash used in investing activities             (22,314)    (3,889)   (37,392)
                                                 ---------  ---------  ---------

Financing activities:
    Issuance (repayment) of long-term
     notes payable                                 10,686    (11,507)    (1,295)
    Issuance (repayment) of short-term
     notes payable                                    (68)     5,022     (4,936)
    Payments on capital lease                        (634)       -          -
    Dividends                                      (4,645)    (4,503)    (4,085)
    Proceeds from exercise of stock options         4,477      1,980      4,360

                                                 ---------  ---------  ---------
Net cash provided by (used in)
 financing activities                               9,816     (9,008)    (5,956)
Effect of exchange rate changes on cash                (1)     1,177     (4,458)
                                                 ---------  ---------  ---------

Increase (decrease) in cash and equivalents        (4,239)    26,588    (13,566)

Cash and equivalents at beginning of period        44,586     17,998     31,564
                                                 ---------  ---------  ---------

Cash and equivalents at end of period            $ 40,347   $ 44,586   $ 17,998
                                                 =========  =========  =========

Supplemental cash flow information:
    Cash paid for interest                       $  2,951   $  2,001   $  2,837
                                                 =========  =========  =========
    Cash paid for income taxes                   $ 14,607   $ 11,155   $  6,676
                                                 =========  =========  =========
    Non-cash transactions:
       Issuance of stock for acquisitions        $    -     $ 21,000   $    785
                                                 =========  =========  =========
       Mortgages assumed in acquisitions         $    -     $  5,265   $    -
                                                 =========  =========  =========
       Property acquired under capital lease     $  4,366   $    -     $    -
                                                 =========  =========  =========

                 See Notes to Consolidated Financial Statements

                                       F-4

                                       23
<PAGE>

CIRCLE INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Significant Accounting Policies

Nature  of  Operations  - Circle  International  Group,  Inc.  and  subsidiaries
(Circle) is an  international  transportation  and logistics  service  provider.
Circle's  services  are  provided  through  its  network  of over  300  offices,
distribution  centers,  and  agents  located in more than 100  countries  on six
continents.  Circle's  principal  lines of business are air freight  forwarding,
ocean freight forwarding,  customs brokerage and other value-added services such
as warehousing,  distribution and insurance. The principal markets for all lines
of business are North America,  Europe and Asia with  significant  operations in
the Middle East, Latin America and the South Pacific (see Note 14).

Basis of  Presentation - The  consolidated  financial  statements of Circle have
been prepared to give retroactive effect to the merger with Alrod International,
Inc. in August 1998 (See Note 3), which was  accounted  for under the pooling of
interests method.

Use of Estimates - The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Risk Factors - Circle's  operations  are  influenced by many factors,  including
economic  and  political  conditions  around the world,  international  laws and
currency  exchange rates. The impact of some of these risk factors is reduced by
having customers in a wide range of industries located throughout the world.

Principles of Consolidation - The accompanying consolidated financial statements
include  Circle  International  Group,  Inc. and its  controlled  majority-owned
subsidiaries. Investments in 50% or less owned affiliates, over which Circle has
significant influence, are accounted for by the equity method (see Note 11). All
significant intercompany balances and transactions have been eliminated.

Foreign  Currency  Translation  - Assets and  liabilities  of  Circle's  foreign
subsidiaries are translated into U.S. dollars at year-end rates of exchange, and
income and expenses are translated at average rates during the year. Adjustments
resulting from translating  financial  statements into U.S. dollars are reported
as cumulative  translation  adjustments and are shown as a separate component of
other comprehensive income in the statements of stockholders'  equity. Gains and
losses from foreign exchange transactions are included in net income.

Cash and  Equivalents  include  demand  deposits and  investments  with original
maturities of three months or less.

Short-term  Investments include deposits of cash in interest-bearing  securities
that have  original  maturities  of greater than 90 days and less than one year.
Such  investments  are  classified as available for sale and the carrying  value
approximates fair value.

Marketable  securities  consist of preferred stock and common stock.  Marketable
securities are stated at market value as determined by the most recently  traded
price of each  security at the balance  sheet date.  By policy,  Circle  invests
primarily in high-grade  marketable  securities.  All marketable  securities are
defined as  available-for-sale  securities  under the provisions of Statement of
Financial  Accounting  Standards  No.  ("SFAS")  115,  "Accounting  for  Certain
Investments in Debt and Equity Securities."

Trade  Receivables  include  disbursements  made  by  Circle  on  behalf  of its
customers for transportation costs and customs duties. The billings to customers
for these disbursements,  which are several times the amount of revenue and fees
derived  from these  transactions,  are not  recorded  as revenue and expense on
Circle's  income  statements.  Management  establishes  reserves  based  on  the
expected ultimate recovery of these  receivables.  Changes in reserves for 1999,
1998 and 1997 are as follows (in thousands):

Allowance for doubtful accounts  Balance at    Charged to             Balance at
                                the beginning   costs and  Deductions  the end
Year Ended December 31,            of year      expenses  /Write-offs  of year
-----------------------         -------------  ---------- ----------- ----------
1999                               $ 7,131      $ 4,705    $ (4,001)   $ 7,835
1998                                 7,816        4,232      (4,917)     7,131
1997                                 5,237        5,050      (2,471)     7,816

                                       F-5

                                       24
<PAGE>

Property is stated at cost.  The cost of property held under  capital  leases is
equal to the lower of the net present value of the minimum lease payments or the
fair value of the leased property at the inception of the lease. Depreciation is
computed principally by the straight-line method at rates based on the estimated
useful  lives of the various  classes of property as follows:  buildings,  20-50
years;  leasehold  improvements,  life of the lease or estimated  useful life if
shorter; equipment and furniture, 3-10 years.

Goodwill,  representing  the excess of purchase price over the fair value of net
assets  acquired,  is  amortized  on a  straight-line  basis  over the period of
expected  benefit,  not  exceeding  40  years.  Accumulated  amortization  as of
December 31, 1999 and 1998, was $14.2 million and $12.2 million, respectively.

Impairment  of Long Lived  Assets - The  carrying  value of long  lived  assets,
including goodwill, is reviewed periodically based on the projected undiscounted
cash flows of the related business unit over the remaining  amortization period.
If the cash flow analysis  indicates that the carrying amount of an asset is not
recoverable,  the carrying  value will be reduced to the estimated fair value of
the assets or the present value of the future cash flows.

Revenue Recognition - Revenue and freight  consolidation costs are recognized at
the time the freight departs the terminal of origin. Customs brokerage and other
revenue are  recognized  upon  completing  the  documents  necessary for customs
clearance  or  completing  other  fee-based  services.  Revenue  realized  as an
indirect  air  carrier  or an ocean  freight  consolidator  includes  the direct
carrier's charges to Circle for carrying the shipment. Revenue realized in other
capacities includes only the commissions and fees received.

Net Income per Share - Basic net income per share is computed  by  dividing  net
income by the weighted  average number of common shares  outstanding  during the
period. The difference between weighted average shares outstanding for basic and
diluted is the  dilutive  effect of  outstanding  stock  options and  restricted
stock.  Diluted net income per share is  computed by dividing  net income by the
weighted  average  number of common shares  outstanding,  including the dilutive
effect of outstanding stock options and restricted stock.

Taxes on Income - Circle provides a deferred tax expense or benefit equal to the
change in the  deferred  tax assets and  liabilities  during the year.  Deferred
income  taxes  represent  tax credit  carry  forwards  and  future  tax  effects
resulting from temporary differences between the financial statement and the tax
basis of assets and liabilities using current or enacted tax rates in effect for
the year in which the differences are expected to reverse.

Foreign  Currency  Forward  Contracts - Circle  uses  foreign  currency  forward
contracts to hedge foreign  currency  exposure on certain trade and intercompany
transactions. These contracts do not subject Circle to risk due to exchange rate
movements because gains and losses on these contracts offset gains and losses on
the payable or receivable  being hedged.  Gains and losses on such contracts are
recognized  currently in the carrying amount of the related payable. At December
31, 1999 and 1998, the notional amount of the foreign currency forward contracts
outstanding  amounted to $0.6 million and $1.9 million,  respectively.  The fair
value of the  contracts  at  December  31,  1999 and  1998,  respectively,  were
insignificant.  Realized  gains and losses on the contracts  for 1999,  1998 and
1997 were insignificant.

Fair Value of Financial Instruments - The fair values presented throughout these
financial   statements   have  been  estimated   using   appropriate   valuation
methodologies  and market  information  available at December 31, 1999 and 1998.
However,  considerable  judgment  is  required  in  interpreting  market data to
develop estimates of fair value and the estimates  presented are not necessarily
indicative  of the  amounts  that  Circle  could  realize  in a  current  market
exchange.  The use of different market  assumptions or estimation  methodologies
could have a material  effect on the estimated  fair values.  Additionally,  the
fair  values  presented  throughout  these  financial  statements  have not been
estimated  since December 31, 1999.  Current  estimates of fair value may differ
significantly from the amounts presented.

The following  methods and  assumptions  were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

     Cash and equivalents,  receivables and payables, short-term investments and
     notes  payable to banks - The  carrying  amount  approximates  fair  value.
     Equity  securities - The fair value is based on quoted  market  prices.  As
     discussed  in  Note  4 to  the  consolidated  financial  statements,  these
     securities are recorded at fair value.


                                       F-6

                                       25
<PAGE>

     Borrowings - The fair value of Circle's  long-term debt is estimated  based
     on quoted  market  prices for the same or similar  issues or on the current
     rates  offered to Circle  for debt of the same  remaining  maturities.  The
     carrying  amounts  approximate  their fair value. The carrying value of the
     capital lease obligation approximates fair value.

     Foreign currency  forward  contracts - The fair value is estimated based on
     the U.S. dollar  equivalent at the contract exchange rate. Any gain or loss
     is largely offset by a change in the value of the  underlying  transaction,
     and is recorded as an  unrealized  foreign  exchange gain or loss until the
     contract maturity date.

Stock-Based  Compensation - Circle accounts for stock-based  awards to employees
using the intrinsic value method in accordance with Accounting  Principles Board
No.  25,  "Accounting  for Stock  Issued to  Employees."  ("APB  No.  25").  The
disclosure   requirements   of  SFAS  No.  123,   "Accounting   for  Stock-Based
Compensation," are set forth in Note 8.

New  Accounting  Standards - In June 1998,  the Financial  Accounting  Standards
Board  issued  Statement  of  Financial  Accounting  Standards  (SFAS) No.  133,
"Accounting  for  Derivative  Instruments  and  Hedging  Activities,"  which was
amended by SFAS 137. SFAS No. 133 defines derivatives, requires that derivatives
be  carried  at fair  value and  provides  for  hedge  accounting  when  certain
conditions  are met. This  statement is effective for Circle  beginning in 2001.
Circle has not assessed the impact of this new statement.

Reclassifications  - Certain  1998 and 1997 amounts  have been  reclassified  to
conform with the 1999 presentation.

Note 2 - Special Charges

During the quarter ended September 30, 1998,  Circle recorded special charges of
$10.7 million related to merger integration costs for Alrod International,  Inc.
(Alrod),  the  write-off of certain  receivables  at Circle Trade  Services Ltd.
(CTSL),   certain  charges  related  to  Latin  America   operations,   facility
consolidation,  the  write-down of  information  technology  assets and employee
severance  costs.  These  charges  were  recorded  in  operating,   selling  and
administrative expenses. As of December 31, 1998, $6.0 million had been utilized
and $4.7  million was  included in other  liabilities.  As of December 31, 1999,
$9.0  million  has  been   utilized  and  $1.7  million  is  included  in  other
liabilities.

Note 3 - Acquisitions

In August 1998,  Circle  acquired  100% of the  outstanding  shares of Alrod,  a
privately owned  international  freight forwarding and customs brokerage company
based on the West Coast of the U.S. In connection with the  acquisition,  Circle
issued  770,642  shares of common stock in exchange  for all of the  outstanding
stock of Alrod.  The total purchase  consideration  was $21.0 million,  of which
$1.0 million continues to be held in escrow subject to the resolution of certain
pre-acquisition contingencies. The acquisition was accounted for as a pooling of
interests.

Summarized  results  of  operations  of  the  separate  companies  prior  to the
combination are as follows (in thousands):

                           6 Months Ended   Years ended
                              June 30,      December 31,
                                1998            1997
                            -----------     -----------
Net revenues:
      Circle                 $ 134,166       $ 262,753
      Alrod                      7,412          15,291
                            -----------     -----------
      Combined               $ 141,578       $ 278,044
                            ===========     ===========

Net income:
      Circle                  $ 13,043        $ 25,871
      Alrod                        259             461
                            -----------     -----------
      Combined                $ 13,302        $ 26,332
                            ===========     ===========

                                       F-7

                                       26
<PAGE>

During  1998,  Circle  also  acquired  interests  in  other  transportation  and
logistics  providers located  primarily in Singapore and the United Kingdom.  In
connection with these acquisitions, the seller retained a minority interest, for
which Circle has buyout options. These acquisitions were accounted for using the
purchase method.  The aggregate  purchase price for these  acquisitions,  net of
cash acquired, was $13.2 million,  resulting in $9.8 million of goodwill that is
being amortized over estimated useful lives of up to 20 years.

During  1997,  Circle  acquired  the assets of various  freight  forwarders  and
customs brokers for an aggregate purchase price of $4.9 million,  including $0.8
million in Circle's common stock.  These  acquisitions  were accounted for using
the purchase method. In connection with these acquisitions, Circle recorded $3.4
million of goodwill,  which is being amortized over estimated useful lives of up
to 20 years.

If all of the purchase method  acquisitions in 1998 and 1997 occurred on January
1 of the respective years, the effect on revenues and net income would have been
immaterial.  The results of these  acquisitions are included in Circle's results
as of the date of the acquisitions.

Note 4 - Equity Securities

Management has designated  equity  securities as available for sale.  Changes in
the fair value of available  for sale  securities,  net of deferred  taxes,  are
excluded from income and presented in the  stockholders'  equity  section of the
balance sheet under the caption  "Accumulated other comprehensive loss." In 1998
and 1997,  Circle sold debt and equity securities and realized losses of $13,000
and $20,000,  respectively.  Total unrealized  losses on equity securities as of
December 31, 1999, 1998 and 1997 were immaterial.

During  the  fourth  quarter  of  1999,  Circle  sold  approximately  30% of its
investment  in the equity  securities  of Equant  N.V.,  an  international  data
network service  provider,  for net proceeds and a pre-tax gain of approximately
$4.5 million and an  after-tax  gain of  approximately  $2.7 million or $.16 per
diluted share.  The pre-tax gain is recorded as Other,  net in the  Consolidated
Income  Statements.  The remaining shares are held in a trust, are not currently
marketable  and have a zero cost basis.  No other gains or losses on the sale of
equity securities occurred during 1999.

Note 5 - Borrowings

Included  in the $7.8  million  notes  payable  to banks  are  $5.9  million  of
overnight borrowing at 6.5%.

Long-term  notes payable  included  commercial  paper of $25.0 million and $14.0
million at December 31, 1999 and 1998.  The  commercial  paper is supported by a
$40.0 million backup  facility line of credit which expires on June 30, 2000, at
which time Circle can convert any  outstanding  borrowings  into a one-year term
loan. The backup  facility line of credit requires Circle to comply with certain
financial  covenants.  Although the  commercial  paper is issued on a short-term
basis,  it is classified  as long-term  because  Circle  intends to reissue such
paper as it matures and has the ability to  refinance on a long-term  basis.  At
December 31, 1999 and 1998,  the weighted  average  interest rate of outstanding
commercial paper was 6.5% and 5.6%, respectively.

At  December  31,  1999  and  1998,   Circle  had  long-term  notes  payable  of
approximately  $7.2 million and $7.6 million,  respectively  (excluding  current
portion and commercial paper), with a weighted average interest rate of 5.8% and
6.0%, respectively. These notes are secured by real property.

Principal  payments on  long-term  notes that mature in 2000  amounting  to $1.9
million are  classified as notes payable to banks.  Principal  payments for 2001
through 2004 are approximately $1.1 million, $0.4 million, $0.1 million and $0.1
million,  respectively.  Principal repayments  thereafter are approximately $5.5
million.  At December 31, 1999,  Circle had unused  borrowing  capacity from its
commercial paper program and lines of credit totaling $19 million.

                                       F-8

                                       27
<PAGE>

Note 6 - Lease Commitments

At December 31, 1999,  commitments  on capital  leases and  long-term  operating
leases with remaining terms greater than one year require the following  minimum
annual payment obligations (in thousands):

                                   Capital     Operating
                                    Lease        Leases
                                  ---------    ----------
2000                               $   608     $  22,530
2001                                   608        15,581
2002                                   608        11,967
2003                                   608         9,494
2004                                   608         8,399
2005 and thereafter                  1,823        56,207
                                  ---------    ----------
Total minimum lease payments         4,863     $ 124,178
                                               ==========
Less amounts representing interest  (1,131)
                                  ---------
Present value of net minimum
   lease payments                    3,732
Less current obligations              (363)
                                  ---------
Long-term obligations              $ 3,369
                                  =========

The carrying  value of property held under the capital lease was $4.4 million at
December 31, 1999, and the  accumulated  amortization  was $0.5 million.  Rental
expense under operating  leases was $21.6 million in 1999, $18.8 million in 1998
and $17.2 million in 1997,  net of rents from  subleases of $1.6  million,  $3.2
million and $1.0 million,  respectively.  Total rental expense (including leases
on equipment) was $24.1 million in 1999, $22.3 million in 1998 and $19.1 million
in 1997.

Note 7 - Contingencies

Circle  is  party  to  routine  litigation  incidental  to its  business,  which
primarily  involves  claims for goods  lost or damaged in transit or  improperly
shipped.  Many of the  lawsuits  to  which  Circle  is a party  are  covered  by
insurance  and are being  defended by Circle's  insurance  carriers.  Circle has
established  reserves for these matters and it is management's  opinion that the
resolution  of such  litigation  will  not have a  material  adverse  effect  on
Circle's consolidated financial statements taken as a whole.

Note 8 - Common Stock

Shareholder Rights Plan

In  October  1994,  Circle  adopted a  Shareholder  Rights  Plan and  declared a
dividend distribution of one preferred share purchase Right for each outstanding
share of Circle's common stock. Each Right will entitle  stockholders to buy one
one-hundredth of a share of a new series of junior participating preferred stock
at an exercise price of $53.00.

The  Rights  will  become  exercisable  if,  without  approval  of the  Board of
Directors, a person or group acquires 20% or more of Circle's common stock (or a
lesser percentage set by the Board in the case of a person determined to present
certain specific risks to Circle and its  stockholders,  as defined in the plan)
or announces a tender offer the  consummation of which would result in ownership
of 20% or more of the common  stock.  If a person or group does  acquire  20% or
more of Circle's  stock (or such lesser  percentage as has been set with respect
to a specific  person)  each Right  unless  redeemed  will entitle its holder to
purchase,  at the Right's then current  exercise  price,  a number of the common
shares  of  Circle  having a  market  value at that  time of twice  the  Right's
exercise price.

Circle  will be entitled to redeem the Rights at .01 cents per Right at any time
before a 20% position (or such lesser percentage as has been set with respect to
a specific  person)  has been  acquired.  Until the Rights  become  exercisable,
Rights  certificates  will  not be sent to  stockholders  and  the  Rights  will
automatically trade with the common stock.

                                       F-9

                                       28
<PAGE>

Employee Stock Purchase Plan

In May 1999, Circle adopted an Employee Stock Purchases Plan in order to provide
eligible  employees  of Circle  and its  participating  subsidiaries  (including
subsidiaries  based outside the United States) with the  opportunity to purchase
common stock through payroll deductions. The employees may purchase Circle stock
during a six-month accumulation period at 85% of the lower of (1) the average of
the stock's market value on the three  consecutive  trading days ending with the
first day of the accumulation  period,  or (2) the average of the stock's market
value  on the  three  consecutive  trading  days  ending  with  last  day of the
accumulation  period.  However,  if the average is lower than the stock's market
value on the  first  day or last day of the  accumulation  period,  the  stock's
market value on the applicable day shall govern. A maximum of 250,000 shares are
authorized for employee  purchase  under this plan. On January 10, 2000,  Circle
issued  17,495  shares at an  average  price of $18.81 per share for the July 1,
1999 to December 31, 1999 accumulation period.

Stock Option Plans

The 1982  Stock  Option  Plan and the 1990 Stock  Option  Plan  provide  for the
granting  of  non-qualified  or  incentive  stock  options to  officers  and key
employees  for a maximum of 956,250  common  shares at not less than fair market
value on the date of grant.  The Human  Resources,  Compensation  and Nominating
Committee  of the Board of  Directors  determine  the  exercise  periods for the
options.  Under  these  plans,  Stock  Options  are  generally  issued  with the
restriction  that no option may be  exercised  before  three  years from date of
grant nor later than eight years from date of grant.

The 1994  Omnibus  Equity  Incentive  Plan  provides  for the  granting of stock
options,  stock appreciation rights,  restricted stock awards,  performance unit
awards and  performance  share awards to key employees and consultants of Circle
and its  subsidiaries.  The plan was  originally  authorized  for a  maximum  of
2,000,000 common shares,  and was amended in May 1998 to increase the maximum to
2,500,000  common shares.  Stock options under this plan are generally issued at
an option  price at not less than fair  market  value on the date of grant.  (To
date, no incentive or non-qualifying  stock options have been granted below fair
market  value.)  Stock  options  under this plan are  generally  issued with the
restriction  that no option  may be  exercised  before one year from the date of
grant nor later than ten years from the date of grant.

The 1999 Stock Option Plan permits the grant of  Nonqualified  Stock  Options in
order to promote the  success,  and enhance the value,  of Circle by linking the
personal  interests  of  Participants  to those of Circle  shareholders,  and by
providing Participants with an incentive for outstanding  performance.  The plan
was authorized for a maximum of 125,000 common shares.  Stock options under this
plan are generally  issued at an option price at not less than fair market value
on the date of grant.  (To date,  no incentive or  non-qualifying  stock options
have been granted  below fair market  value.)  Stock options under this plan are
generally issued with the restriction that no option may be exercised before one
year from the date of grant nor later than ten years from the date of grant.

A  summary  of stock  option  transactions  for each of the  three  years  ended
December 31, 1999, follows:

                                      F-10

                                       29
<PAGE>

                                           Shares            Weighted Average
                                        Under Option          Exercise Price
                                        ------------          --------------
Outstanding at December 31, 1996          1,401,842               $16.60
      Granted                               422,950                23.29
      Exercised                            (283,590)               15.40
      Canceled                             (143,923)               16.73
                                          ----------
Outstanding at December 31, 1997          1,397,279                18.93
      Granted                               796,250                23.95
      Exercised                            (113,399)               15.95
      Canceled                             (266,700)               25.58
                                          ----------
Outstanding at December 31, 1998          1,813,430                20.64
      Granted                               343,653                18.58
      Exercised                            (287,007)               15.42
      Canceled                             (206,589)               20.75
                                          ----------
Outstanding at December 31, 1999          1,663,487               $21.03
                                          ==========

                                                  December 31,
                                          1999         1998        1997
                                          ----         ----        ----
Options available for grant             583,662      844,903     841,718
Options exercisable                     785,278      730,974     441,567
Weighted average fair value of options
      granted during the year            $ 6.35       $ 7.20      $ 8.37


The following table summarizes  information  about stock options  outstanding at
December 31, 1999:

                          OPTIONS OUTSTANDING            OPTIONS EXERCISABLE
                    ----------------------------------  ------------------------
                                 Weighted      Weighted                Weighted
   Range of                       Average      Average                  Average
 Exercisable         Number      Remaining     Exercise      Number    Exercise
    Prices         of Shares  Life (in years)   Price      of Shares     Price
---------------   ----------- --------------- ---------   ----------   ---------
$12.75 - 17.19      421,640        6.76        $ 16.11      147,270     $ 15.16
 17.25 - 20.75      334,249        4.06          18.66      252,525       18.35
 21.00 - 22.75      383,849        6.38          21.93      144,032       22.08
 22.94 - 26.63      435,149        6.15          25.56      219,299       25.89
 26.75 - 27.50       88,600        6.30          27.28       22,152       27.28
                  ----------                              ---------
$12.75 - 27.50    1,663,487        5.95        $ 21.03      785,278     $ 20.79
                  ==========                              =========

                                      F-11

                                       30
<PAGE>

SFAS No. 123 Pro Forma Disclosures

Circle  applies APB No. 25 and related  interpretations  in  accounting  for its
Stock Options Plan described above.  Accordingly,  since all options are granted
at fair market value, no  compensation  cost has been recognized for its options
granted.  Had compensation  cost for Circle's stock option plans been determined
based on the fair value at the grant dates of the stock options, consistent with
the method suggested in SFAS No. 123, "Accounting for Stock Based Compensation",
Circle's  net income and net income per share would have been reduced to the pro
forma amounts indicated below (in thousands except per share amounts):

                                    Year ended December 31,
                                 1999          1998         1997
                                 ----          ----         ----

Net Income:   As Reported     $ 23,212      $ 18,515     $ 26,332
              Pro Forma         21,454        16,674       25,142

Net Income per share:
      Basic - As Reported     $  1.35       $  1.09      $  1.57
              Pro Forma          1.25          0.98         1.49

    Diluted - As Reported     $  1.34       $  1.07      $  1.53
              Pro Forma          1.24          0.97         1.46

The fair value of each option  grant is estimated on the date of the grant using
the Black-Scholes  option-pricing  model which requires  subjective  assumptions
such as future  stock price  volatility  and expected  time to  exercise.  These
assumptions  greatly affect the calculated  values.  Circle's  calculations  are
based on a multiple option valuation  approach and  cancellations  are estimated
based on a historical  pattern.  However,  in accordance  with SFAS No. 123, the
impact of  outstanding  unvested  stock  options  granted prior to 1995 has been
excluded  from the pro  forma  calculation.  The  1997,  1998 and 1999 pro forma
adjustments  are not  indicative  of future  period pro forma  adjustments.  The
following weighted-average assumptions were used:

                                            Year Ended December 31,
                                       1999         1998         1997
                                       ----         ----         ----
Expected dividend yield                1.10%        1.00%        1.00%
Expected volatility                      46%          43%          37%
Risk-free interest rate                5.84%        4.67%        5.62%
Expected lives (years from vesting)     0.7          0.5          0.7

Note 9 - Taxes on Income

Taxes on income include the following (in thousands):

                           1999         1998         1997
                        ---------    ---------    ---------

Federal:   Current      $  2,782     $  2,711     $   (637)
           Deferred       (1,910)       1,199        6,535

State:     Current           817          426        1,370
           Deferred          -            481         (363)

Foreign:   Current        11,787        7,830        7,315
           Deferred         (133)         283          358
                        ---------    ---------    ---------
Total                   $ 13,343     $ 12,930     $ 14,578
                        =========    =========    =========

                                      F-12

                                       31
<PAGE>


Significant components of Circle's net deferred tax liability are as follows (in
thousands):

                                               1999            1998
                                             --------        --------
Deferred tax liabilities:
Undistributed earnings of subsidiaries       $ 9,043         $ 9,459
Accelerated depreciation                       4,693           5,025
Gain on sale of property                       2,680           2,533
Incentive compensation                             -              16
Investment in subsidiary                         273             273
                                             --------        --------
                                             $16,689         $17,306
                                             ========        ========
Deferred tax assets:
Bad debts                                    $ 1,774         $ 1,292
Vacation pay                                     930             836
Incentive compensation                            75             -
Insurance claims reserves                        979             523
Other                                            329             313
                                             --------        --------
                                             $ 4,087         $ 2,964
                                             --------        --------
Net deferred tax liability                   $12,602         $14,342
                                             ========        ========

Taxes on  income  were  different  than the  amount  computed  by  applying  the
statutory  income tax rate.  Such  differences  are  summarized  as follows  (in
thousands):

                                                    1999       1998       1997
                                                 ---------  ---------  ---------
Income before taxes                              $ 36,555   $ 31,445   $ 40,910

Tax computed at 35% statutory rate                 12,794     11,006     14,319
Increases (decreases) resulting from:
    Foreign taxes lower than federal rate          (1,495)    (1,347)    (1,184)
    Non-deductible items                            1,643      2,273      1,212
    State taxes on income,
       net of federal income tax effect               531        590        654
    Deferred tax adjustment for foreign earnings   (1,800)       -          -
    Accrual adjustments                             1,415        413       (661)
    Other                                             255         (5)       238
                                                 ---------  ---------  ---------
    Total                                        $ 13,343   $ 12,930   $ 14,578
                                                 =========  =========  =========

Taxes on income include  deferred  income taxes on  undistributed  earnings (not
considered permanently invested) of consolidated subsidiaries, net of applicable
foreign tax credits.  At December 31, 1999,  cumulative earnings of consolidated
foreign subsidiaries designated as permanently invested were approximately $15.6
million.  Deferred  income  taxes  are  not  provided  on  permanently  invested
earnings.

Sources of pretax income are summarized as follows (in thousands):

                    1999          1998         1997
                  ---------     ---------    ---------
Domestic          $  9,456      $  7,790     $ 18,944
Foreign             27,099        23,655       21,966
                  ---------     ---------    ---------

Total             $ 36,555      $ 31,445     $ 40,910
                  =========     =========    =========

                                      F-13

                                       32
<PAGE>

Note 10 - Other Income-Net

Other income-net includes the following (in thousands):

                                  1999           1998           1997
                               ---------      ---------      ---------
Interest income                 $ 2,682        $ 4,416        $ 4,163
Interest expense                 (2,986)        (1,941)        (2,938)
Income from affiliates, net       3,922          3,853          5,785
Gains on sales of assets            815            257            633
Gains (losses) on sales of
   equity securities              4,519            (13)           (20)
Minority interests               (1,092)          (928)        (1,286)
Net foreign exchange gains        1,151          1,365          2,162
Other                               331            607             38
                               ---------      ---------      ---------
Total                           $ 9,342        $ 7,616        $ 8,537
                               =========      =========      =========


Note 11 - Investments in Unconsolidated Affiliates

Investments in net assets of affiliated  companies amounted to $48.2 million and
$43.0  million  at  December  31,  1999 and 1998,  respectively.  This  includes
Circle's 40%  investment in TDS Logistics  Inc. (TDS) of $40.8 million and $38.0
million  as of  December  31,  1999 and  1998,  respectively.  TDS is  primarily
involved in providing  specialty  packaging and services for automotive exports.
The TDS investment balance includes the excess of purchase price over net assets
of  $25.6  million  and  $26.4  million  as  of  December  31,  1999  and  1998,
respectively,  which is being amortized over 37 years. The results of operations
and financial position of TDS are summarized below (in thousands):

Condensed Income Statement Information for the year ended December 31:
                                          1999           1998          1997
                                        ---------      ---------     ---------
Revenue                                 $ 63,486       $ 77,521      $ 95,981
Income from operations                    13,884         15,348        23,929
Net income                                 8,947          8,682        12,983

Condensed Balance Sheet Information:
                                              December 31,
                                          1999           1998
                                        ---------      ---------
Current assets                          $ 15,881       $ 15,815
Non-current assets                        33,134         31,626
Current liabilities                        9,402          8,807
Non-current liabilities                      439          9,613
Stockholders' equity                      39,174         29,021


Note 12 - Employee Benefit Plans

Circle has a 401(k) Savings Plan in the U.S. under which employees generally may
contribute up to 15% of compensation  to the plan. For every dollar  contributed
to the plan, Circle will match 50 cents, up to a maximum of 6% of the employee's
compensation. Circle's contributions for the years ended December 31, 1999, 1998
and 1997  were  $1.2  million,  $1.0  million  and $0.9  million,  respectively.
Circle's  contributions  vest over a four year period.  Circle has various other
employee benefit plans outside of the U.S.

Note 13 - Related Party Transaction

In April 1999,  Circle  sold a 49%  interest  in its  subsidiaries  in Spain and
Portugal to a Director and Former Chief Executive Officer for $1.3 million.  The
purchase  price was paid  one-third  at closing and the balance will be in equal
installments in October 2000 and April 2002 with interest at 6%. Under the terms
of the  agreement,  the buyer has the right to require  Circle to  purchase  his
interest  at the then fair  value.  Circle  also has the right to  purchase  his
interest after December 31, 2005. Circle deferred the recognition of the gain of
the sale of $866,000 and has recorded this amount in minority interest.

                                      F-14

                                       33
<PAGE>

Note 14 - Business Segment Information

Circle's reportable segments are geographic segments that offer similar products
and services.  They are managed  separately  because each segment requires close
customer  contact and each segment is affected by similar  economic  conditions.
Certain information  regarding Circle's operations by region is summarized below
(in thousands):

<TABLE>
<CAPTION>
                                                Europe &      Asia &
                                                 Middle       South                     Elimi-      Consoli-
                                   Americas       East       Pacific     Corporate     nations       dated
                                  ----------   ----------   ----------   ----------  -----------   ----------
                                                                (in thousands)

<S>                               <C>          <C>          <C>          <C>         <C>           <C>
Year ended December 31, 1999:
Total revenue                     $ 364,087    $ 197,620    $ 279,642    $     -     $  (27,272)   $ 814,077
Transfers between regions            (8,362)      (8,031)     (10,879)         -         27,272          -
                                  ----------   ----------   ----------   ----------  -----------   ----------
Revenues from customers           $ 355,725    $ 189,589    $ 268,763    $     -     $      -      $ 814,077
                                  ==========   ==========   ==========   ==========  ===========   ==========
Net revenue                       $ 164,964    $  92,006    $  75,022    $     -     $      -      $ 331,992
                                  ==========   ==========   ==========   ==========  ===========   ==========
Income (loss) from operations      $ 22,486    $  14,414    $  18,043    $ (27,730)  $      -      $  27,213
                                  ==========   ==========   ==========   ==========  ===========   ==========
Identifiable assets               $ 211,222    $ 150,432    $ 140,070    $  60,960   $  (17,292)   $ 545,392
                                  ==========   ==========   ==========   ==========  ===========   ==========


Year ended December 31, 1998:
Total revenue                     $ 390,877    $ 167,173    $ 197,330    $     -     $  (17,702)   $ 737,678
Transfers between regions            (6,492)      (3,935)      (7,275)         -         17,702          -
                                  ----------   ----------   ----------   ----------  -----------   ----------
Revenues from customers           $ 384,385    $ 163,238    $ 190,055    $     -     $      -      $ 737,678
                                  ==========   ==========   ==========   ==========  ===========   ==========
Net revenue                       $ 161,095    $  81,361    $  59,224    $     -     $      -      $ 301,680
                                  ==========   ==========   ==========   ==========  ===========   ==========
Income (loss) from operations      $ 24,541    $  12,268    $  9,809     $ (22,789)  $      -      $  23,829
                                  ==========   ==========   ==========   ==========  ===========   ==========
Identifiable assets               $ 191,021    $ 139,300    $ 153,311    $ 118,358   $ (108,261)   $ 493,729
                                  ==========   ==========   ==========   ==========  ===========   ==========


Year ended December 31, 1997:
Total revenue                     $ 422,151    $ 147,628    $ 167,053    $     -     $  (19,843)   $ 716,989
Transfers between regions            (7,442)      (3,613)      (8,788)         -         19,843          -
                                  ----------   ----------   ----------   ----------  -----------   ----------
Revenues from customers           $ 414,709    $ 144,015    $ 158,265    $     -     $      -      $ 716,989
                                  ==========   ==========   ==========   ==========  ===========   ==========
Net revenue                       $ 159,055    $  71,065    $  47,924    $     -     $      -      $ 278,044
                                  ==========   ==========   ==========   ==========  ===========   ==========
Income (loss) from operations      $ 32,037    $  10,408    $   9,169    $ (19,241)  $      -      $  32,373
                                  ==========   ==========   ==========   ==========  ===========   ==========
Identifiable assets               $ 214,520    $ 117,432    $ 102,098    $ 123,914   $ (123,565)   $ 434,399
                                  ==========   ==========   ==========   ==========  ===========   ==========
</TABLE>

Revenue from transfers between regions represents approximate amounts that would
be charged if the  services  were  provided by an  unaffiliated  company.  Total
regional  revenue is reconciled with total  consolidated  revenue by eliminating
inter-regional revenue.

                                      F-15

                                       34
<PAGE>

     Circle  is  domiciled  in the U.S.  The U.S.  had  revenues  from  external
     customers of $329 million in 1999,  $356 million in 1998,  and $382 million
     in 1997.  The U.S.  had long lived assets of $57 million and $41 million at
     the end of 1999 and 1998, respectively.

The  following  tables show the  approximate  amounts of revenue and net revenue
attributable  to Circle's  principal  services during each of the three years in
the period ended December 31, 1999 (in thousands):

                                      Year Ended December 31,
                                 1999            1998            1997
                              ----------      ----------      ----------
Revenue:
Air freight forwarding        $ 528,698       $ 482,701       $ 471,563
Ocean freight forwarding        130,478         111,938         111,200
Customs brokerage and other     154,901         143,039         134,226
                              ----------      ----------      ----------
   Total                      $ 814,077       $ 737,678       $ 716,989
                              ==========      ==========      ==========


Net Revenue:
Air freight forwarding        $ 130,065       $ 118,170       $ 106,210
Ocean freight forwarding        47,026           40,471          37,608
Customs brokerage and other    154,901          143,039         134,226
                              ----------      ----------      ----------
   Total                      $ 331,992       $ 301,680       $ 278,044
                              ==========      ==========      ==========

Note 15 - Quarterly Data (unaudited)

(in thousands, except per share amounts)
                                           Net     Net Income (Loss)
                                Net      Income        per share       Dividends
                   Revenue    Revenue    (Loss)    Basic     Diluted   per share
                   --------   --------  --------  -------------------  ---------
1999 Quarters
   4th Quarter    $ 231,046   $ 90,793  $ 9,757     $ 0.56     $ 0.56   $ 0.135
   3rd Quarter      204,963     83,582    6,760       0.39       0.39       -
   2nd Quarter      195,215     81,451    4,820       0.28       0.28     0.135
   1st Quarter      182,853     76,166    1,875       0.11       0.11       -


1998 Quarters
   4th Quarter    $ 206,706   $ 82,517  $ 5,757     $ 0.34     $ 0.34   $ 0.135
   3rd Quarter*     190,799     77,585     (544)     (0.03)     (0.03)      -
   2nd Quarter      174,760     73,005    7,857       0.46       0.45     0.135
   1st Quarter      165,413     68,573    5,445       0.32       0.31       -

* Net loss includes special charges of $8.1 million, ($0.47 per diluted share).

                                      F-16

                                       35
<PAGE>


Independent Auditors' Report

The Board of Directors and Stockholders of Circle International Group, Inc.:

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Circle
International  Group,  Inc. and subsidiaries  (the "Company") as of December 31,
1999 and 1998, and the related  consolidated  income  statements,  statements of
stockholders' equity and statements of cash flows for each of the three years in
the  period  ended  December  31,  1999.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of Circle International
Group, Inc. and subsidiaries as of December 31, 1999 and 1998 and the results of
their  operations and their cash flows for each of the three years in the period
ended  December 31, 1999 in  conformity  with  accounting  principles  generally
accepted in the United States of America.





/S/ DELOITTE & TOUCHE LLP
San Francisco, California
March 29, 2000

                                      F-17

                                       36
<PAGE>


                              EMPLOYMENT AGREEMENT


     THIS  EMPLOYMENT  AGREEMENT  ("Agreement")  is entered into  between  Steve
Russell (the "Employee" or "Shareholder") and Circle  International  Group, Inc.
("Circle  "  or  "Purchaser")  and  Alrod   International,   Inc.   ("Alrod"  or
"Employer").


     WHEREAS,   Circle   contracted   with  the  Shareholder  for  the  sale  of
Shareholder's  stock in Alrod and in  connection  with such sale  Circle  wishes
Alrod to employ  Employee under the terms and conditions set forth below,  Alrod
wishes to employ Employee under such  conditions,  and Employee wishes to accept
employment under the terms and conditions set forth below;


     NOW, THEREFORE,  for and in consideration of the above stated premises, and
the mutual  promises  and  agreements  set forth  herein,  the parties  agree as
follows:


     1.   Terms and Duties.
          ----------------

          (a) Term of Employment The employment of Employee under this Agreement
shall be for five (5) years and is terminable as more  particularly set forth in
Paragraph 2. Before the end of the third year of Employee's  employment,  either
Employee or Employer may notify the other upon sixty (60) days written notice of
termination  of the Agreement for any reason.  Renewal of the agreement  will be
reviewed sixty (60) days before the five (5) year expiration and will be subject
to the mutual agreement of Employee and Employer.

          (b) Location.  Employee's  location of employment  shall be in the San
Francisco Bay Area.  Employee's  location of employment may be changed only upon
the mutual consent of Employee and Employer.


          (c) Position and Primary  Responsibility.  Employee shall serve in the
position of Executive Vice President,  Alrod and Senior Vice  President,  Circle
International,  Inc.. In such capacity,  he shall be  responsible  for all areas
reasonably requested by the Chief Executive Officer,  North America.  Employee's
responsibilities and objectives are detailed in Exhibit A attached hereto.

          (d) Exclusivity. During the employment term, Employee shall devote his
full time, attention,  energies, and best efforts exclusively to the performance
of his duties for and on behalf of Employer.


                                       37
<PAGE>

     2.   Termination.
          -----------

          (a)  Immediate  Termination  of  Employment  by Employer. Employer may
              ---------------------------------------------------
immediately  terminate this Employment Agreement at any time under the following
conditions:

               (i)  Upon  the  Employee's  death or  incapacity.  In such  case,
     Employee's  compensation  shall be  calculated  through the last day of the
     month in which said death or incapacity occurred, and paid to Employee, his
     heirs or estate;

                  (ii)  The  conviction  of  any  felony  or  of  a  misdemeanor
      involving  fraud or dishonesty,  and/or the commission or omission of acts
      deemed  to  be  fraudulent  or   materially   dishonest.   In  such  case,
      compensation  shall be calculated  through the last day actually worked by
      Employee.

          (b)  Termination  of  Employment  for Cause.  Employer  may  terminate
               --------------------------------------
Employee's  employment for cause,  which shall include,  without  limitation,  a
breach of any of the material terms of this  Agreement,  a material and repeated
failure  to  follow  either  general   corporate   policies  or  the  reasonable
instructions  of the Board of  Directors  of Employer or of the Chief  Operating
Officer,  North America, a material failure to substantially  perform Employee's
duties, a material conflict of interest, or fraud or dishonesty.  Employee shall
be given  reasonable  notice of any of the grounds for termination of employment
for cause, and shall be given the opportunity to discuss and address such notice
with the Chief Executive Officer of Circle.

          (c)  Termination  of  Employment   Without  Cause.  In  the  event  of
               --------------------------------------------
termination  without  cause,  Employee's  sole remedy shall be an entitlement to
receive his then base  monthly  salary  throughout  the  remaining  term of this
Agreement.  During which time Employee shall accept no other employment  without
the consent of Employer,  which consent shall not be unreasonably  withheld. Any
amounts received from a subsequent employer shall be in mitigation of Employer's
responsibilities to make payment hereunder,  and shall be offset against amounts
due by Employer.

     3.   Compensation.  Employee  shall be provided the following  compensation
          ------------
for his services to Employer:


          (a)  Base Salary.  Employee  shall receive a base salary of $14,500.00
               -----------
per month.

          (b)  Bonus.  Employee's bonus shall be governed by the standard Circle
               -----
incentive plan in effect for key employees.


          (c)  Payment.  All compensation to Employee hereunder shall be paid in
               -------
accordance with all relevant  Employer  directives,  rules,  and regulations and
cost accounting policies in effect from time-to-time and shall be subject to all
applicable employment and withholding taxes.

                                       38
<PAGE>

     4.   Other Employment Benefits.
          -------------------------

     Employer's  insurance  and benefit  plans will be available to Employee and
his  dependents  on the same basis as it is  currently  provided  to  comparably
situated employees.

     Employee will accrue each year  three-weeks of paid vacation.  All vacation
accrued  for  Employee  on the books of Alrod  will be  carried  on the books of
Alrod.

     Employee also will be entitled to participate in the Employer's 401-K plan,
executive  deferred  compensation  plan,  and other plans  offered to comparably
situated employees.

     Employee  will be entitled to maintain the  automobile,  which the Employer
currently  leases on behalf of the Employee,  during the term of this Agreement.
All expenses  associated with the personal use of the automobile will be paid by
Employee.  Following  expiration of the current  automobile  lease, the Employer
shall have no further obligation to lease an automobile for Employee,  but shall
pay Employee a $700 monthly automobile allowance.

     5.   Business  Interests.  This  Agreement  is  ancillary  to the  sale  of
          -------------------
Shareholder's stock in Alrod covered in a separate written agreement hereinafter
referred to as the "Purchase and Sale  Agreement."  The date of the execution of
the Purchase and Sale Agreement is the "Closing Date" referred to hereafter.  In
connection with the purchase and sale of Shareholder's stock in Alrod, Circle is
acquiring  an interest  in Alrod's'  trade  secrets,  confidential  information,
proprietary  information  and goodwill.  Employee is being employed  pursuant to
agreements made in the purchase and sale of  Shareholder's  stock in Alrod.  The
following  are  the  parties'  agreements  concerning   legitimate   protectable
"Business Interests" of Circle and Alrod:

          (a)  Trade Secrets. Alrod and Circle agree that Employee will be given
               -------------
access to and allowed to become  familiar with trade secrets of Alrod and Circle
to the extent applicable to Employee's  position.  Employee agrees that Employee
will  preserve  the value of these  trade  secrets for Alrod and Circle and will
only use them as required in the ordinary  course of Employee's  employment  for
the exclusive benefit of Alrod and Circle.

                                       39
<PAGE>

          (b)  Confidential  Information.  Alrod and Circle agree that they will
               -------------------------
provide  Employee  with  access  to  Confidential   Information   applicable  to
Employee's  position.  The parties agree that,  for purposes of this  Agreement,
"Confidential  Information" is any information that has been or will be acquired
by the Employee in the course and scope of his  activities  for Employer that is
designated by Alrod or Circle as  "confidential"  or that they indicate  through
their policies,  procedures or other  instructions  should not be disclosed to a
third party except through controlled means regardless whether it qualifies as a
trade secret or not. The disclosure of Confidential  Information to customers or
vendors  for  legitimate   business   purposes  and  the   availability  of  the
Confidential   Information   to  others  outside  of  Alrod  or  Circle  through
independent  investigation  and effort will not remove it from protected  status
under this Agreement if Employee  acquired the  Confidential  Information  while
employed with Employer or in  connection  with the Purchase and Sale  Agreement.
Employee agrees to use such  Confidential  Information for the exclusive benefit
of Circle and Alrod and will not (during employment or thereafter),  directly or
indirectly, use Confidential Information for any other purpose. General examples
of covered Confidential Information are as follows:  customer pricing, the names
and phone numbers of customer  contacts,  customer  contracts,  information  and
communication systems, the menus of services provided to the customers,  and the
transaction files maintained by Employer on its customers.

          (c)  Proprietary  Information.  Alrod and Circle  agree that  Employee
               ------------------------
will be allowed to use  proprietary  information  and  materials  applicable  to
Employee's   position.   Proprietary   information   includes   trade   secrets,
confidential  information,  and other  information  or materials  such as books,
drawings,  notes,  plans,  research,  and other items compiled or created at the
expense of Circle or Alrod or  through  the labor of their  employees.  Employee
agrees  to use this  proprietary  information  and  material  for the  exclusive
benefit of Circle and Alrod.

          (d)  Goodwill.  Employer agrees to provide Employee with compensation,
               --------
confidential  information,  contact  with  customers,  contractors,  vendors and
co-workers,  and other assistance in developing a working  relationship with the
business  associates  of  Circle  and  Alrod in order to help  Employee  develop
goodwill  for the  benefit  of Circle and Alrod,  to the  extent  applicable  to
Employee's  position.  Employee agrees to use the goodwill  developed with these
customers,  contractors,  vendors and  co-workers  for the exclusive  benefit of
Circle and Alrod.

          (e)  Business Opportunities. Circle and Alrod agree that Employee will
               ----------------------
be placed in a  position  to have  knowledge  of special  confidences,  business
opportunities  and  strategies  of Circle and Alrod.  Employee  agrees to inform
Circle  and Alrod of any  potential  business  opportunities  or  ventures  that
Employee learns of during the term of this Agreement irrespective of how or when
the  knowledge  is acquired if the  opportunity  relates to the type of business
Employer is engaged in or is considering  engaging in.  Employee also agrees not
to pursue  independently,  divert away,  or inform any other person or entity of
such opportunities without first getting verification from Employer that it does
not intend to pursue the opportunity.

     6.   Protective Covenants. Employee agrees that the following covenants are
          --------------------
reasonable and necessary protective covenants for the protection of the Business
Interests  identified above and do not unreasonably impede Employee's ability to
earn a living:

                                       40
<PAGE>

          (a)  Restrictions  on Diverting  Employees.  Employee  covenants  that
               -------------------------------------
until the later of (a) ten years from the Closing  Date,  or (b) five years from
the date of  termination  of such  Employee's  employment  with  Employer or its
affiliates  for any reason  whatsoever,  Employee will not,  either  directly or
indirectly,  call on, solicit,  or induce any of the other employees or officers
of Alrod or Circle that Employee had contact with,  knowledge of, or association
with in the course of employment  with Employer to terminate  their  association
with Alrod or Circle.

          (b)  Restrictions  on  Diverting  Vendors  or  Contractors.   Employee
               -----------------------------------------------------
covenants  that until the later of (a) ten years from the Closing  Date,  or (b)
five years  from the date of  termination  of such  Employee's  employment  with
Employer or its affiliates for any reason  whatsoever  Employee will not, either
directly  or  indirectly,  call on,  solicit,  or induce  any of the  vendors or
contractors of Alrod or Circle that Employee had contact with,  knowledge of, or
association  with in the course of employment  with Employer to terminate  their
association with Alrod or Circle.

          (c)  Restrictions on Soliciting Customers.  Until the later of (a) ten
               ------------------------------------
years from the Closing Date, or (b) five years from the date of  termination  of
such  Employee's  employment  with  Employer  or its  affiliates  for any reason
whatsoever,  Employee will not call on, service,  or solicit competing  business
from  Customers  of Alrod or Circle that  Employee  had (i) contact with or (ii)
access to  information  and files about  within the  previous  twenty-four  (24)
months.  These restrictions are limited,  by geography,  to the specific places,
addresses,  or locations  where a covered  customer is present and available for
solicitation or servicing.

          (d)  Noncompetition.  Employee  agrees that until the later of (a) ten
               --------------
years from the Closing Date, or (b) five years from the date of  termination  of
such  Employee's  employment  with  Employer  or its  affiliates  for any reason
whatsoever,  he will not  directly  or  indirectly,  either  through any form of
ownership  or as a director,  officer,  principal,  agent,  employee,  employer,
adviser,   consultant,   Employee,   partner  or  in  any  other  individual  or
representative capacity whatsoever, either for his own behalf or for the benefit
of any other person, firm,  corporation,  governmental or private entity, or any
other entity of whatever kind,  compete with Alrod or Circle or their affiliates
in the customs  brokerage,  freight forwarding and/or warehouse and distribution
business California or Tijuana, Mexico.

          (e)  Survival of  Covenants.  Each  covenant of Employee  set forth in
               ----------------------
Paragraph 6 hereof shall survive the termination of Employee's  employment.  The
existence of any claim or cause of action by Employee  against  Alrod or Circle,
whether  predicated  on this  Agreement  or  otherwise,  shall not  constitute a
defense to the  enforcement  of Paragraph 6's  covenants.  In the event Employee
violates the restrictions of Paragraph 6 and an enforcement  remedy is necessary
under Paragraph  6(f), the restricted  time periods  provided for in Paragraph 6
shall be calculated  from the date  enforcement  is ordered and complied with by
Employee so as to give Employer the full benefit of the length of time bargained
for.

                                       41
<PAGE>

          (f)  Remedies. In the event of breach or threatened breach by Employee
               --------
of any provision of Paragraph 6 hereof, Alrod or Circle shall be entitled to (i)
relief by temporary restraining order,  temporary  injunction,  and/or permanent
injunction,  (ii) recovery of all attorneys'  fees and costs incurred by them in
obtaining such relief,  and (iii) any other legal and equitable  relief to which
they may be entitled,  including any and all monetary damages.  Alrod and Circle
have the right to pursue partial  enforcement  and/or to seek declaratory relief
regarding the  enforceable  scope of this Agreement  without penalty and without
waiving their right to pursue any other applicable remedy thereafter,  including
arbitration.

          (g)  Acknowledgement   of  Ancillary   Agreements  and  Consideration.
               ----------------------------------------------------------------
Employee acknowledges that his agreement to be bound by the protective covenants
set forth in Paragraph 6 is a concurrent  and  material  inducement  for (i) all
parties to enter into the ancillary  terms of this  Agreement (ii) for Circle to
contract for the purchase and sale of Shareholder's  interest in Alrod and (iii)
to initiate the employment of Employee in connection  with the purchase and sale
of  Shareholder's  interest in Alrod.  Without such  agreements  and  covenants,
Circle would not have entered into the Purchase and Sale Agreement and would not
have agreed to pay the purchase  price nor would  Employer have agreed to employ
Employee under the terms provided for in this Agreement.

          (h)  Continuing  Effect of Restrictions.  The agreements  described in
               ----------------------------------
Paragraphs 5 and 6 will continue in full effect throughout Employee's employment
with Employer without regard to any change in compensation or other terms of the
Agreement  between the parties  unless  otherwise  agreed in writing,  or unless
modified pursuant to Paragraph 6(i) below.

          (i)  Modifications  of  Restrictions.  Circle  or  Alrod  may  make  a
               -------------------------------
reasonable  change  in the  restrictions  in  Paragraph  6 as a  condition  of a
reassignment,  promotion,  or other  change in  duties  for  Employee  through a
written  addendum.  In such event,  Circle or Alrod will provide  Employee  with
fourteen  (14)  calendar  days  written  notice of the  change in terms to allow
Employee  an  opportunity  to object and  challenge  the  reasonableness  of the
change.  Employee's action in remaining  employed with Employer after the notice
period for the change has elapsed will be deemed a contractual acceptance of the
change in terms.

     7.   Written Policies and Procedures. Employee agrees to adhere to policies
          -------------------------------
and procedures of Alrod and Circle,  where not in contradiction to or superseded
by this Agreement,  as from  time-to-time may be amended by Alrod or Circle (and
called  to the  Employee's  attention),  and  agrees  that  these  policies  and
procedures  shall be binding upon Employee.  Employee  acknowledges  the duty to
examine these  policies and procedures in advance of any action in any action in
any case of doubt as to the Employee's conduct, right or obligation.

     8.   Notices.  All notices,  requests,  consents,  and other communications
          -------
under  this  Agreement  shall be in  writing  and  shall be  deemed to have been
delivered  on the  date  personally  delivered  or on the  date  deposited  in a
receptacle  maintained  by the United  States  Postal  Service for such purpose,
postage prepaid,  by certified mail, return receipt requested,  addressed to the
address set forth on the signature page.  Either party may designate a different
address by providing written notice of the new address to the other party.

                                       42
<PAGE>

     8.   Severability.   If  any  provision  contained  in  this  Agreement  is
          ------------
determined to be void,  illegal or unenforceable,  in whole or in part, then the
other  provisions  contained  herein shall remain in full force and effect as if
the provision which was determined to be void, illegal, or unenforceable had not
been contained  herein.  The parties  further  expressly  agree to authorize any
applicable  court of law to modify  the  protective  restrictions  contained  in
Paragraph  6 of this  Agreement  to the  extent  necessary  to make  them  fully
enforceable  with such  modification to include the  modification or addition of
any missing terms necessary to enforce the intent of the parties.

     9.   Modification  and  Integration.  This  Instrument  contains the entire
          ------------------------------
agreement of the parties concerning the obligations of the parties and any prior
agreements  between the parties to the contrary  are replaced and  extinguished.
Except as  provided  for in  Paragraph  (i)  above,  this  Agreement  may not be
modified,  altered or amended  except by written  agreement  of all the  parties
hereto.

     10.  Waiver, Notice and Opportunity to Cure. The waiver by any party hereto
          --------------------------------------
of a breach of any provision of this  Agreement or a comparable  agreement  with
another  employee  prohibiting  unfair  competition  shall  not  operate  or  be
construed as a waiver of any subsequent  breach by any party to this  Agreement.
In the event  Employee  becomes aware of any breach of any material term of this
Agreement by Circle or Alrod,  Employee will give that party  written  notice of
the  alleged  breach  within  thirty (30) days and an  opportunity  to cure such
alleged  breach  within  thirty  (30) days.  Failure to provide  this notice and
opportunity  to cure will  waive any right to assert  that  alleged  breach as a
defense to the enforcement of this Agreement by Alrod or Circle at a later time.

     11.  Arbitration.  The parties agree to arbitrate any and all disputes that
          -----------
may arise from the relationships created by this agreement including any and all
contract claims,  tort claims,  or statutory claims pursuant to the rules of the
American  Arbitration  Association  (AAA)  in  San  Francisco,  California.  One
arbitrator shall be used unless otherwise agreed. Workers compensation insurance
claims and  unemployment  compensation  insurance  claims will not be covered by
this provision.  Alrod and/or Circle may seek temporary  injunctive relief for a
violation  of  Paragraph 6 from an  applicable  court of law before  pursuing or
compelling  arbitration in order to maintain the status quo pending a resolution
through  arbitration.  One arbitrator  shall be a licensed  attorney and will be
selected by mutual agreement or by alternative  strikes from a panel of at least
five (5) arbitrators  provided by the AAA. Employee shall have the first strike.
The arbitrator's  decision will be supported by findings of fact and conclusions
of law  sufficient to support the decision made. The decision shall be final and
binding  upon the  parties.  The  arbitrator's  authority is limited to applying
those rights and remedies  that have been  expressly  authorized  by  applicable
state and federal law. The arbitrator is authorized to order  injunctive  relief
and other  equitable  remedies.  The parties  agree that if there is any dispute
over whether the arbitrator has exceeded his authority or has otherwise rendered
a decision that  contradicts  applicable  state or federal law, the parties will
agree to submit the matter to a court of law for deposition by summary  judgment
based on the arbitration  record.  In all other respects the arbitration will be
conducted  pursuant to the AAA Employment  Dispute  Resolution Rules. Each party
will bear its own costs and attorney's fees.

                                       43
<PAGE>

     12.  Counterpart Execution and Headings.  This Agreement may be executed in
          ----------------------------------
two or more identical  counterparts,  each of which shall be deemed an original,
but all of which  together  shall  constitute  but one and the same  instrument.
Headings in this  document  are not intended to affect the content or meaning of
any provisions of this Agreement and should not be construed to do so.


                                       44
<PAGE>


IN WITNESS WHEREOF, the parties have fully completed and executed this Agreement
on the last date indicated below.


                                    EMPLOYEE:

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

                                    Printed Name:
                                                 -------------------------

                                    Date:
                                         ---------------------------------

                                    Address:
                                            ------------------------------



                                    CIRCLE:

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

                                    By:
                                       -----------------------------------

                                    Printed Name and Position:
                                                              ------------
                                    --------------------------------------


                                    Date:
                                         ---------------------------------

                                    Address:
                                            ------------------------------


                                    ALROD:


                                    By:
                                       -----------------------------------

                                    Printed Name and Position:
                                                              ------------
                                    --------------------------------------


                                    Date:
                                         ---------------------------------

                                    Address:
                                            ------------------------------



                                       45
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                                                                       Exhibit A
Position Description - Mr. Stephen Russell



The following is the position description for Mr. Stephen Russell


Title                Senior Vice  President,  Strategic & Business  Development,
-----
                     California Region

Location             The position  will be located at either the Alrod  facility
--------
                     or the Circle facility in South San Francisco

Effective Date       August 1, 1998,  however,  this is subject to change if the
--------------
                     proposed merger of Circle and Alrod is postponed

Compensation         As per employment agreement
----------

Reporting            This  position  will  report to the C.O.O.,  North  America
---------
                     with a strong dotted line to the C.O.O., California Region

Tasks                The tasks for this position are as follows:
-----
                    Assist with the integration of Alrod's customers into the
                         combined Circle/Alrod company
                    Managing the sales group in California
                    Developing new business for C.I.I./Alrod  California and the
                         rest of Circle's global organization
                    Developing   strategic   opportunities   in  California  and
                         globally
                    Retention of current customers
                    The  performance of other tasks and duties  consistent  with
                         the  position,  as and when  directed  by the person to
                         whom the Executive reports




                                       46
<PAGE>






EXHIBIT 21.1
LIST OF SUBSIDIARIES

The following  table sets forth  certain  information  concerning  the principal
subsidiaries of Circle as of December 31, 1999.

                                                    State or other
        Name                                 jurisdiction of incorporation
        ----                                 -----------------------------

Alrod International, Inc.                             California
CE Logistics (Asia) Pte. Ltd.                         Singapore
Circle Airfreight Japan, Ltd.                         California
Circle Concord International (Singapore) Pte. Ltd.    Singapore
Circle International (Argentina) S.A                  Argentina
Circle International (Espana) S.R.L.                  Spain
Circle International, Inc.                            Delaware
Circle International Asia Pacific Holdings Pte. Ltd.  Singapore
Circle International (Australia) Pty., Ltd.           Australia
Circle International Belgium N.V.                     Belgium
Circle International (Canada) Ltd.                    Canada
Circle International European Holdings, Ltd.          United Kingdom
Circle International Holdings, Inc.                   Delaware
Circle International (Hong Kong) Ltd.                 Hong Kong
Circle International Japan, Inc.                      Japan
Circle International Korea Co. Limited                Korea
Circle International Latin America Holdings S.A.      Uruguay
Circle International Limited                          United Kingdom
Circle International (Netherlands) BV                 Netherlands
Circle International (Portugal) Ltda.                 Portugal
Circle International Speditionsgesellschaft GmbH      Germany
Circle International (Sweden) AB                      Sweden
Circle Freight International (India) Pvt. Ltd.        India
Circle Freight International (Italia) S.R.L.          Italy
CFS New Zealand Ltd.                                  New Zealand
Circle Freight International Philippines Ltd., Inc.   Philippines
Circle Fretes Internacionais do Brasil Ltda.          Brazil
Circle Worldbridge International (Thailand) Ltd.      Thailand
C.I.H. (Belgium) BVBA                                 Belgium
Darrell J. Sekin & Co., Inc.                          Texas
F.J. Tytherleigh & Co. Ltd.                           United Kingdom
Harper Logistics International S.A.                   France
J.R. Michels Inc.                                     Texas
Max Gruenhut B.V.                                     Netherlands
Max Gruenhut GmbH                                     Germany
Regga Holdings Limited                                Bermuda
Regga Insurance Limited                               Bermuda

The  names of  certain  subsidiaries  have been  omitted  because  such  unnamed
subsidiaries,  considered in the  aggregate,  would not constitute a significant
subsidiary as that term is defined in Regulation S-X.


                                       47
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT

We consent to the  incorporation  by reference in  Registration  Statements  No.
33-44357,  No.  33-35272,  No.  33-53557,  No.  333-17601,   No.  33-04139,  No.
333-04141,   No.   333-64147,   No.   333-78747  and  No.  333-85807  of  Circle
International  Group,  Inc. and subsidiaries of our report dated March 29, 2000,
appearing in this Annual Report on Form 10-K of Circle International Group, Inc.
and subsidiaries for the year ended December 31, 1999.


/S/ DELOITTE & TOUCHE LLP
San Francisco, California
March 29, 2000



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