UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                  FORM 10-Q


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

                For the quarterly period ended June 30, 2001

                                     OR

                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from N/A to N/A


                        Commission File Number  1-12149


                    CONSOLIDATED FREIGHTWAYS CORPORATION


                    Incorporated in the State of Delaware
                I.R.S. Employer Identification No. 77-0425334

                   16400 S.E. CF Way, Vancouver, WA  98683
                       Telephone Number (360) 448-4000

Indicate  by  check  mark whether the registrant (1) has filed  all  reports
required to be filed by Sections 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




              Number of shares of Common Stock, $.01 par value,
                 outstanding as of July 31, 2001: 22,041,475




                     CONSOLIDATED FREIGHTWAYS CORPORATION
                                  FORM 10-Q
                         Quarter Ended June 30, 2001

____________________________________________________________________________
____________________________________________________________________________

                                    INDEX



  PART I.  FINANCIAL INFORMATION                                     Page

   Item 1. Financial Statements

             Consolidated Balance Sheets -
              June 30, 2001 and December 31, 2000                      3

             Statements of Consolidated Operations -
              Three and Six Months Ended June 30, 2001 and 2000        5

             Statements of Consolidated Cash Flows -
               Six Months Ended June 30, 2001 and 2000                 6

             Notes to Consolidated Financial Statements                7

  Item 2.  Management's Discussion and Analysis of
            Financial Condition and Results of Operations             11

  Item 3.  Quantitative and Qualitative Disclosures
            About Market Risk                                         15



PART II.   OTHER INFORMATION

  Item 1.  Legal Proceedings                                          16

  Item 4.  Submission of Matters to a Vote of Security Holders        16

  Item 5.  Stockholder Proposals                                      16

  Item 6.  Exhibits and Reports on Form 8-K                           17


SIGNATURES                                                            18


                        PART I. FINANCIAL INFORMATION
                        ITEM 1. Financial Statements

                    CONSOLIDATED FREIGHTWAYS CORPORATION
                              AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS



                                                      June  30,     December 31,
                                                        2001           2000
                                                       (Dollars in thousands)

ASSETS

CURRENT ASSETS
   Cash and cash equivalents                        $   37,859     $   46,523
   Trade accounts receivable, net of allowances        354,716        334,155
   Other receivables                                    27,361          8,742
   Operating supplies, at lower of average
     cost or market                                      7,558          8,419
   Prepaid expenses                                     44,325         41,286
   Deferred income taxes                                76,664         70,610
      Total Current Assets                             548,483        509,735

PROPERTY, PLANT AND EQUIPMENT, at cost
   Land                                                 90,447         81,697
   Buildings and improvements                          362,794        350,137
   Revenue equipment                                   533,969        518,086
   Other equipment and leasehold improvements          153,923        149,123
                                                     1,141,133      1,099,043
   Accumulated depreciation and amortization          (758,375)      (750,249)
                                                       382,758        348,794
OTHER ASSETS
   Deposits and other assets                            83,755         68,153
                                                        83,755         68,153

TOTAL ASSETS                                        $1,014,996     $  926,682



      The accompanying notes are an integral part of these statements.


                    CONSOLIDATED FREIGHTWAYS CORPORATION
                              AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS



                                                     June 30,   December 31,
                                                       2001         2000

                                                      (Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                                 $  97,013      $ 97,741
   Accrued liabilities                                229,587       211,043
   Accrued claims costs                                89,216        86,674
   Federal and other income taxes                       2,508            --
   Short-term borrowings                               69,500            --
      Total Current Liabilities                       487,824       395,458

LONG-TERM LIABILITIES
   Long-term debt                                      15,100         15,100
   Accrued claims costs                                96,960         99,074
   Employee benefits                                  122,196        120,317
   Deferred income taxes                               18,517          6,282
   Other liabilities                                   59,142         38,267
      Total Liabilities                               799,739        674,498

SHAREHOLDERS' EQUITY
   Preferred stock, $.01 par value; authorized
     5,000,000 shares; issued none                         --             --
   Common stock, $.01 par value; authorized
     50,000,000 shares; issued 23,133,848 shares          231            231
   Additional paid-in capital                          74,898         75,767
   Accumulated other comprehensive loss               (12,711)       (11,293)
   Retained earnings                                  163,191        200,067
   Treasury stock, at cost (1,181,433 and 1,436,712
     shares, respectively)                            (10,352)       (12,588)
       Total Shareholders' Equity                     215,257        252,184

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY         $1,014,996      $ 926,682



      The accompanying notes are an integral part of these statements.



<TABLE>
                                        CONSOLIDATED FREIGHTWAYS CORPORATION

                                       STATEMENTS OF CONSOLIDATED OPERATIONS
                                   (Dollars in thousands except per share amounts)


                                            For the Three Months Ended     For the Six Months Ended
                                                      June 30,                    June 30,
                                                2001          2000          2001          2000

<S>                                          <C>           <C>           <C>           <C>
REVENUES                                     $  590,415    $  586,101    $1,164,993    $1,179,730

COSTS AND EXPENSES
    Salaries, wages and benefits                391,857       377,971       765,615       757,631
    Operating expenses                          123,826       110,946       226,959       226,761
    Purchased transportation                     60,152        46,330       113,140        95,455
    Operating taxes and licenses                 16,448        18,092        32,831        36,560
    Claims and insurance                         16,002        17,452        31,163        35,511
    Depreciation                                 13,852        13,181        26,777        26,922
                                                622,137       583,972     1,196,485     1,178,840
OPERATING INCOME (LOSS)                         (31,722)        2,129       (31,492)          890

OTHER INCOME (EXPENSE)
   Investment income                                166           539           390           892
   Interest expense                              (2,037)       (1,220)       (3,893)       (2,307)
   Miscellaneous, net                               336          (126)         (313)       (4,232)
                                                 (1,535)         (807)       (3,816)       (5,647)

Income (loss) before income taxes (benefits)    (33,257)        1,322       (35,308)       (4,757)
Income taxes (benefits)                           1,792         1,215         1,568        (1,885)

NET INCOME (LOSS)                            $  (35,049)   $      107    $  (36,876)   $   (2,872)

Basic average shares outstanding             21,920,756    21,458,860    21,870,028    21,404,836
Diluted average shares outstanding (a)       21,920,756    21,458,860    21,870,028    21,404,836

Basic Earnings (Loss) per Share:             $    (1.60)   $      -      $    (1.69)   $    (0.13)

Diluted Earnings (Loss) per Share:           $    (1.60)   $      -      $    (1.69)   $    (0.13)

<F/N>

(a) The three and six-months ended June 30, 2001 do not include 428,073 and 336,205 potentially dilutive
     securities, respectively, because to do so would be anti-dilutive.


                            The accompanying notes are an integral part of these statements.
</TABLE>




                    CONSOLIDATED FREIGHTWAYS CORPORATION
                               AND SUBSIDIARIES
                    STATEMENTS OF CONSOLIDATED CASH FLOWS


                                                       Six Months Ended
                                                            June, 30
                                                       2001         2000
                                                    (Dollars in thousands)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD      $  46,523     $  49,050

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                              (36,876)       (2,872)
Adjustments to reconcile net
  loss to net cash provided (used) by
  operating activities:
Depreciation and amortization                          31,500        30,125
Increase (decrease) in deferred income taxes            6,181       (24,469)
Gains from property disposals, net                    (19,665)       (3,044)
Issuance of common stock under stock
  and benefit plans                                     1,232         1,358
Changes in assets and liabilities:
   Receivables                                        (18,180)       31,076
   Prepaid expenses                                    (3,039)       (3,637)
   Accounts payable                                      (728)      (11,810)
   Accrued liabilities                                 18,544        18,932
   Accrued claims costs                                   428          (379)
   Income taxes                                         2,508         1,841
   Employee benefits                                    1,879         1,965
   Other                                                1,273         3,177
   Net Cash Provided (Used) by Operating Activities   (14,943)       42,263

CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures                               (64,895)      (19,110)
   Software expenditures                               (1,583)       (4,417)
   Proceeds from sales of property                      3,122         4,983
   Acquisition of First Air, net of cash acquired          --          (576)
   Net Cash Used by Investing Activities              (63,356)      (19,120)

CASH FLOWS FROM FINANCING ACTIVITIES
   Net proceeds from (repayments of)
     short-term borrowings                             69,500          (691)
   Proceeds from exercise of stock options                135           --
   Purchase of common stock                                --          (267)
   Net Cash Provided (Used) by Financing Activities    69,635          (958)

Increase (Decrease) in Cash and Cash Equivalents       (8,664)       22,185

CASH AND CASH EQUIVALENTS, END OF PERIOD            $  37,859     $  71,235



      The accompanying notes are an integral part of these statements.



                CONSOLIDATED FREIGHTWAYS CORPORATION
                           AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

       The   accompanying   consolidated  financial   statements   of
Consolidated  Freightways Corporation and subsidiaries (the  Company)
have  been  prepared  by the Company, without  audit  by  independent
public  accountants,  pursuant to the rules and  regulations  of  the
Securities  and  Exchange Commission.  In the opinion of  management,
the  consolidated  financial statements include all normal  recurring
adjustments  necessary to present fairly the information required  to
be  set  forth  therein.  Certain information  and  note  disclosures
normally included in financial statements prepared in accordance with
accounting  principles generally accepted in the United  States  have
been  condensed  or omitted from these statements  pursuant  to  such
rules and regulations and, accordingly, should be read in conjunction
with  the consolidated financial statements included in the Company's
2000  Annual Report to Shareholders.  Certain amounts in prior years'
financial statements have been reclassified to conform to the current
year presentation.

      There  were no significant changes in the Company's commitments
and  contingencies as previously described in the 2000 Annual  Report
to  Shareholders  and  related annual report to  the  Securities  and
Exchange  Commission on Form 10-K, except as discussed in Footnote  7
below.


2. Segment and Geographic Information

        The    Company    primarily   provides    less-than-truckload
transportation,  air freight forwarding and supply  chain  management
services  throughout  the United States and Canada,  as  well  as  in
Mexico  through  a joint venture, and international freight  services
between  the  United States and more than 80 countries.  The  Company
does  not  present segment disclosures as the air freight forwarding,
supply  chain management and international service offerings  do  not
meet the quantitative thresholds of Statement of Financial Accounting
Standards  No.  131 "Disclosures about Segments of an Enterprise  and
Related  Information." The following information sets forth  revenues
and  property, plant and equipment by geographic location.   Revenues
are  attributed to geographic location based upon the location of the
customer.   No one customer provides 10% or more of total revenues.

Geographic Information

(Dollars in thousands)

                       Three                          Six
                    Months Ended                  Months Ended
                       June 30,                      June 30,
                   2001     2000                2001         2000

Revenues
United States    $552,363  $549,349          $1,090,793   $1,107,252
Canada             38,052    36,752              74,200       72,478
Total            $590,415  $586,101          $1,164,993   $1,179,730



Geographic Information (continued)

                                         As of
                                        June 30,
                                   2001       2000

Property, Plant and Equipment
United States                    $348,253   $323,780
Canada                             34,505     35,444
Total                            $382,758   $359,224



3. Comprehensive Income (Loss)

      Comprehensive income (loss) for the three and six months  ended
June 30, 2001 and 2000 is as follows:

(Dollars in thousands)
                                       Three                Six
                                   Months Ended         Months Ended
                                      June 30,              June 30,
                                  2001       2000       2001      2000

Net Income (Loss)               $(35,049)  $  107   $(36,876)   $(2,872)
Other comprehensive income
   (loss):
  Foreign currency
    translation adjustments          892      (56)    (1,418)       (63)
Comprehensive Income (Loss)     $(34,157)  $   51   $(38,294)   $(2,935)



4. Credit Facility

      On  April 27, 2001, the Company entered into a five-year,  $200
million  credit  facility,  securitized by  accounts  receivable,  to
provide  for  working  capital  and letter  of  credit  needs.   This
facility  replaces a previous $155 million unsecured credit facility.
Letters  of  credit  are limited to $100 million and  borrowings  are
limited to an agreed upon availability calculation.  Borrowings  bear
interest at either the commercial paper rate or LIBOR, plus a  margin
(75  basis points as of June 30th). As of June 30, 2001, the  Company
had  $69.5  million  of short-term borrowings and  $73.0  million  of
letters  of credit outstanding. The continued availability  of  funds
under  the  facility  requires that the Company comply  with  certain
financial convenants, the most restrictive of which is to maintain  a
minimum  EBITDAL  (earnings  before  interest,  taxes,  depreciation,
amortization  and  lease  expense).  The  facility  was  subsequently
amended to provide for more flexible financial covenants and to allow
the Company to be in compliance as of June 30th.  The Company expects
to be in compliance in the third quarter, but without an improvement
in the economy or improvement in planned cost savings and yield
enhancment programs, the Company does not expect to be in compliance
with the EBITDAL covenant in the fourth quarter.  There can
be  no  assurance  that  the  Company  will  not  require  additional
amendments this year or thereafter, or, if required, the lender
will grant them.

      As  a  condition of the amendments, the Company is required  to
have  $50  million of additional financing in place by October  15th,
from  which  the proceeds will be applied to outstanding drawings  on
letters  of  credit,  if  any, and short-term  borrowings  under  the
facility.   The  Company  is  pursuing real estate-backed  financing,
including  sale and leaseback transactions, to meet the October  15th
condition.  The Company currently has a letter of intent, subject  to
due diligence, in excess of the $50 million requirement. Although the
Company anticipates securing the required financing, no assurance can
be  made.  Additional conditions of the amendments are an increase in
the  margin  on borrowings to 125 basis points through  November  15,
2001  (subject  to  change  thereafter  depending  on  the  Company's
financial   performance),  and  changes   to   the   cash   borrowing
availability calculation.


5.  Income Taxes

      Deferred tax assets and liabilities in the Consolidated Balance
Sheets  are  classified  based upon the related  asset  or  liability
creating  the deferred tax.  Deferred taxes not related to a specific
asset or liability are classified based upon the estimated period  of
reversal.   As a result of the domestic loss during the quarter,  the
Company  recorded  a  $14.1 million income tax  benefit  and  related
deferred  tax  asset.   However, due to  recent  cumulative  domestic
losses,   current  accounting  standards  required  a  $14.1  million
valuation allowance be recorded.  The Company also assessed the  need
for  a  valuation  allowance against the existing $62.7  million  net
deferred tax asset of its domestic subsidiaries. Through the  use  of
tax  planning  strategies, involving the sale of certain  appreciated
assets,  the Company has determined that it is more likely  than  not
that the net deferred tax asset as of June 30, 2001 will be realized.
As  a  result, no additional valuation allowance was recorded.  Until
the cumulative loss is eliminated, the Company will record additional
valuation  allowance  against  any tax benefit  arising  from  future
losses.  The Company will continue to assess the realizability of its
deferred   tax   assets  and  adjust  the  valuation   allowance   as
appropriate.


6.  Recently Adopted Accounting Standards

      The  Company  adopted the provisions of Statement of  Financial
Accounting  Standards No. 133 (SFAS 133). "Accounting for  Derivative
Instruments and Hedging Activities" effective January 1, 2001.   SFAS
133 requires that an organization recognize all derivatives as either
assets  or  liabilities  on  the balance  sheet  at  fair  value  and
establishes the timing of recognition of the gain/loss based upon the
derivative's intended use.  Adoption of this standard did not have an
impact on the Company's financial position or results of operations.


7. Contingencies

       In  October 1997, lawsuits were filed against the Company  and
its principal operating subsidiary in Riverside County Superior Court
of  California, claiming invasion of privacy and related tort  claims
for  intentional and negligent infliction of emotional  distress  and
seeking  the  recovery of punitive, statutory and emotional  distress
damages in unspecified amounts.  Those lawsuits arose out of the  use
of  hidden  cameras  at  a  California terminal  facility,  including
restrooms, in order to combat a problem with theft and drugs.   There
are   approximately  500  plaintiffs,  mostly  unionized   employees.
Subsequently,  the  United  States District  Court  for  the  Central
District of California dismissed the lawsuit as to employees  on  the
basis  that the claims and issues in question are matters covered  by
the  collective  bargaining agreement and subject to the  arbitration
and  grievance procedures.  The decision was affirmed by the 9th U.S.
Circuit  Court of Appeals, but later reversed by an en banc panel  of
the  9th Circuit in June 2001, and returned to state court for  trial
under  state law.  The Company is in the process of filing a petition
for  certiorari  to  the U.S. Supreme Court.  It is  the  opinion  of
management  that the ultimate outcome of the claims will not  have  a
material  adverse  effect  on  the Company's  financial  position  or
results of operation.

      The  Company and its subsidiaries are involved in various other
lawsuits  incidental  to  their businesses.  It  is  the  opinion  of
management that the ultimate outcome of these actions will not have a
material  adverse  effect  on  the Company's  financial  position  or
results of operations.



        CONSOLIDATED FREIGHTWAYS CORPORATION AND SUBSIDIARIES
           ITEM 2. Management's Discussion and Analysis of
            Financial Condition and Results of Operations

     Revenues for the quarter ended June 30, 2001 increased 0.7% on a
1.0%  increase  in  tonnage, compared with the prior  year.   Tonnage
increased,  despite a continued economic slowdown, due to  aggressive
sales  efforts  but  was  offset by a 1.2% decrease  in  revenue  per
hundredweight.  Revenue per hundredweight decreased due primarily  to
a  change  in  freight  mix,  reflecting a decrease  in  higher-rated
expedited  freight.   Shipments increased 1.3%  and  the  weight  per
shipment decreased 0.5%.  Revenues for the six-month period decreased
1.2%  on  a tonnage decrease of 2.2%.  The tonnage decrease  reflects
the  impact of the economic slowdown and the effects of severe winter
weather  in  the first quarter.  Revenue per hundredweight  increased
marginally,  as  a  fuel surcharge and benefits of  a  rate  increase
offset  the change in freight mix.  Shipments decreased 2.4% and  the
weight per shipment increase was marginal.

      Salaries, wages and benefits increased 3.7% in the quarter  due
primarily  to increased tonnage, a 3.4% contractual wage and  benefit
increase effective April 1st and sales force incentive bonuses.   The
Company  benefited from improved cross-dock and pick-up and  delivery
efficiencies as a result of process improvement programs.   Salaries,
wages  and  benefits increased 1.1% in the six-month period,  despite
lower tonnage, due to the contractual wage and benefit increase noted
above  and  lower freight handling efficiencies in the first  quarter
due  to  the effects of severe winter weather.  The prior  year  six-
month  period  includes  $4.3 million of  severance  pay  due  to  an
administrative reorganization.

      Operating  expenses  increased 11.6%  in  the  quarter  due  to
increased  tonnage, a higher average fuel cost per gallon,  increased
lease  expense on revenue equipment, repair and maintenance  expense,
professional services expense and software amortization.  The quarter
includes  $0.4  million of gains on sale of real properties  compared
with  $3.2 million in the prior year.  Excluding the gains, operating
expenses   increased  8.9%.   For  the  six-month  period,  operating
expenses  were unchanged, despite lower tonnage.  Excluding gains  on
sale  of  real property of $20.0 million in the six-month period  and
$3.2 million in the prior year, operating expenses increased 7.4% for
the  reasons noted above, as well as costs associated with the severe
winter weather.  Operating expenses in both the quarter and six-month
periods were partially offset by increased use of rail services.

      Purchased  transportation increased 29.8% in  the  quarter  and
18.5%  in  the six-month period due to increased use of rail services
in  strategic  lanes. Rail miles as a percentage of inter-city  miles
increased  to  28.9% during the quarter compared with  22.1%  in  the
prior year.  For the six- month period, rail miles increased to 27.6%
compared with 22.5% in prior year.

      Operating taxes and licenses decreased 9.1% in the quarter  and
10.2% in the six-month period due primarily to increased use of  rail
services.  The six-month period also reflects lower tonnage.

      Claims and insurance decreased 8.3% in the quarter and 12.2% in
the  six-month  period due primarily to improved  claims  experience.
The  Company benefited from process improvement programs directed  at
reducing  freight  damage and increasing vehicular safety.  The  six-
month period also reflects lower tonnage.

      Depreciation  increased 5.1% in the quarter  due  to  increased
capital   expenditures.   For  the  six-month  period,   depreciation
decreased  slightly  as a higher proportion of the  Company's  assets
became fully depreciated.

      The  operating loss for the quarter was $31.7 million  compared
with  an  operating profit of $2.1 million in the  prior  year.   The
operating  ratio  deteriorated to 105.4% from  99.6%.   The  Canadian
operations  contributed  $3.8 million  of  operating  income  in  the
quarter  compared  with  $3.3 million in the prior  year.   Excluding
gains  on sale of real property, the operating loss was $32.2 million
in  the  quarter compared with a $1.1 million operating loss  in  the
prior  year.  For the six-month period, the operating loss was  $31.5
million  compared  with an operating profit of $0.9  million  in  the
prior  year.  The operating ratio deteriorated to 102.7% from  99.9%.
The  Canadian operations contributed $6.6 million of operating income
in the six-month period compared with $6.1 million in the prior year.
Excluding gains on sale of real property, the operating loss for  the
six-month  period  was $51.5 million compared with  a  loss  of  $2.3
million in the prior year.

      Other  expense,  net,  increased $0.7 million  in  the  quarter
primarily due to increased interest expense on higher average  short-
term  borrowings and interest expense on a tax obligation payable  to
the  former  parent.  The six-month period, also impacted  by  higher
interest expense on increased debt levels, decreased $1.8 million due
to  the  fact that the prior year included a $4.0 million charge  for
settlement of a tax sharing liability with the former parent.

      The  Company's  effective tax rate differs from  the  statutory
federal rate due to foreign taxes and the recording of a deferred tax
valuation allowance during the quarter.  As a result of the  domestic
loss  during the quarter, the Company recorded a $14.1 million income
tax  benefit and related deferred tax asset.  However, due to  recent
cumulative  domestic losses, current accounting standards required  a
$14.1  million  valuation allowance be recorded.   The  Company  also
assessed  the  need  for a valuation allowance against  the  existing
$62.7  million  net deferred tax asset of its domestic  subsidiaries.
Through  the  use of tax planning strategies, involving the  sale  of
certain  appreciated assets, the Company has determined  that  it  is
more  likely than not that the net deferred tax asset as of June 30th
will be realized.  As a result, no additional valuation allowance was
recorded.  Until the cumulative loss is eliminated, the Company  will
record additional valuation allowance against any tax benefit arising
from  future  losses.   The  Company  will  continue  to  assess  the
realizability  of  its deferred tax assets and adjust  the  valuation
allowance as appropriate.

      Due to continued economic uncertainty, the Company expects that
it  will  not  return to profitability in 2001.  To reduce  operating
costs, management is continuing with aggressive cost control measures
including  headcount and salary reductions, as well as other  general
and  administrative expense reductions.  Programs aimed at increasing
pick-up  and  delivery and dock efficiencies, increasing load  factor
and   reducing  claims  expense  are  proving  successful  at  select
terminals  and  will  be expanded across the  terminal  system.   The
resulting  cost savings, along with a 5.1% general rate  increase  on
non-contractual  accounts  effective  August  1st,  should  partially
offset the impact of the contractual wage and benefit increase.   The
Company  is  also  continuing  to  refine  its  freight  profile,  by
emphasizing  higher  quality,  more profitable  weight  brackets  and
aggressively marketing its higher-rated expedited service offering.

      As  discussed in the Company's Annual Report on Form 10-K,  the
Company  has  various  stock incentive plans under  which  restricted
stock  has  been granted.  There are approximately 950,000 restricted
shares  that had not achieved the pre-determined increases  in  stock
price  required  for  vesting as of June 30th.  Compensation  expense
will  be  recognized for those shares once the stock price meets  the
required levels. Of the 950,000 shares, 843,000 will be forfeited  if
the  stock  price does not meet the required levels  by  December  2,
2001.   The  remaining shares must meet the required stock prices  by
May 12, 2002.

      The  Company continues to experience increased fuel  costs  per
gallon.  The Company's rules tariff implements a fuel surcharge  when
the  average cost per gallon of on-highway diesel fuel exceeds $1.10,
as  determined  from  the Energy Information  Administration  of  the
Department of Energy's publication of weekly retail on-highway diesel
prices.  The  Company  currently has  a  fuel  surcharge  in  effect.
However, there can be no assurance that the Company will be  able  to
maintain this surcharge or successfully implement such surcharges  in
response to increased fuel costs in the future.

      In  June 2001, the Financial Accounting Standards Board  issued
Statement  of  Financial  Accounting Standards  No.  142  (SFAS  142)
"Goodwill  and  Other  Intangibles."   SFAS  142  will  require  that
goodwill  and other intangible assets that have indefinite  lives  no
longer  be  amortized,  but  will be  subject  to  impairment  review
annually.   Intangible assets with finite useful lives will  continue
to  be  amortized.  The Company will adopt SFAS 142 effective January
1,  2002.  The Company expects that adoption will not have a material
impact on the Company's financial condition or results of operations.


LIQUIDITY AND CAPITAL RESOURCES

      As  of June 30, 2001, the Company had $37.9 million in cash and
cash  equivalents.  Net cash used by operating  activities  of  $14.9
million  compares with $42.3 million provided by operating activities
for  the  same  period last year.  The decrease was due primarily  to
increased   operating  losses  (adjusted  for  non-cash  items)   and
increased accounts receivable, partially offset by increased accounts
payable.

      Net cash used by investing activities of $63.4 million compares
with  $19.1  million  in  the same period last  year.   The  increase
primarily reflects the purchases of strategic terminal properties  in
Brooklyn,  NY,  Laredo,  TX, and Phoenix,  AZ,  as  well  as  revenue
equipment  previously under lease.  The Company expects  capital  and
software  expenditures  to  be  approximately  $15  million  for  the
remainder  of  the  year,  primarily  for  the  purchase  of  revenue
equipment and technology enhancements, but has the ability  to  defer
these expenditures in the event of further business deterioration.

      The Company sold its administrative facility in Portland, OR in
March  2001.  Consideration received was in the form of a $21 million
note  receivable,  bearing interest at 6.45% per  annum,  due  on  or
before  September 25, 2001.  Proceeds from the note will be  used  to
repay a $20 million tax obligation to the Company's former parent.

      Net  cash  provided by financing activities  of  $69.6  million
primarily  reflects  net short-term borrowings  under  the  Company's
credit  facility.  Net borrowings of $69.5 million compares with  net
repayments  of  $0.7  million  in the same  period  last  year.   The
increased  borrowings were used to fund the operating activities  and
capital expenditures discussed above.

      Due  to  continued economic uncertainty, the Company  does  not
expect  to  generate positive cash flow during the remainder  of  the
year.   The  Company  expects  that its existing  cash  balances  and
available borrowings under its credit facility, discussed below, will
be  adequate  to  satisfy its short-term operating cash  and  capital
expenditure  requirements, although no assurance can  be  made.   The
Company  is  pursuing  options to improve  its  short  and  long-term
liquidity including the sale of surplus real properties and a  senior
debt offering, secured with real estate.

       As  discussed  in Footnote 4, on April 27, 2001,  the  Company
entered  into a five-year, $200 million credit facility,  securitized
by  accounts receivable, to provide for working capital and letter of
credit  needs.   This  facility  replaces  a  previous  $155  million
unsecured  credit facility.  Letters of credit are  limited  to  $100
million  and  borrowings are limited to an agreed  upon  availability
calculation.  Borrowings bear interest at either the commercial paper
rate or LIBOR, plus a margin (75 basis points as of June 30th). As of
June 30, 2001, the Company had $69.5 million of short-term borrowings
and  $73.0  million of letters of credit outstanding.  The  continued
availability  of funds under the facility requires that  the  Company
comply  with  certain financial convenants, the most  restrictive  of
which  is  to  maintain a minimum EBITDAL (earnings before  interest,
taxes,  depreciation, amortization and lease expense).  The  facility
was  subsequently amended to provide for more flexible financial
covenants and to allow the Company to be in compliance as of June 30th.
The Company expects to be in compliance in the third quarter, but
without an improvement in the economy or improvement in planned cost
savings and yield enhancment programs, the Company does not expect
to be in compliance with the EBITDAL covenant in the fourth quarter.
There can be  no  assurance  that  the  Company  will  not  require
additional amendments this year or thereafter, or, if required, the lender
will grant them.

      As  a  condition of the amendments, the Company is required  to
have  $50  million of additional financing in place by October  15th,
from  which  the proceeds will be applied to outstanding drawings  on
letters  of  credit,  if  any, and short-term  borrowings  under  the
facility.   The  Company  is  pursuing real estate-backed  financing,
including  sale and leaseback transactions, to meet the October  15th
condition.  The Company currently has a letter of intent, subject  to
due diligence, in excess of the $50 million requirement. Although the
Company anticipates securing the required financing, no assurance can
be  made.  Additional conditions of the amendments are an increase in
the  margin  on borrowings to 125 basis points through  November  15,
2001  (subject  to  change  thereafter  depending  on  the  Company's
financial   performance),  and  changes   to   the   cash   borrowing
availability calculation.


OTHER

      On  August  2, 2001, Patrick J. Brady resigned as  Senior  Vice
President-Sales  and  Marketing.   On  February  9,  2001,  Henry  C.
Montgomery was elected to the Board of Directors for a one-year term,
replacing John M. Lillie.   Raymond F. O'Brien resigned from Board of
Directors on May 24, 2001.

      Certain statements included or incorporated by reference herein
constitute "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities  Exchange Act of 1934, as amended, and are  subject  to  a
number   of   risks  and  uncertainties.   Any  such  forward-looking
statements included or incorporated by reference herein should not be
relied  upon as predictions of future events.  Certain such  forward-
looking  statements  can be identified by the use of  forward-looking
terminology  such as "believes," "expects," "may," "will,"  "should,"
"seeks,"   "approximately,"   "intends,"   "plans,"   "pro    forma,"
"estimates,"  or  "anticipates"  or the  negative  thereof  or  other
variations  thereof or comparable terminology, or by  discussions  of
strategy,  plans or intentions.  Such forward-looking statements  are
necessarily  dependent on assumptions, data or methods  that  may  be
incorrect  or imprecise and they may be incapable of being  realized.
In  that regard, the following factors, among others, and in addition
to  matters  discussed elsewhere herein and in documents incorporated
by  reference herein, could cause actual results and other matters to
differ  materially  from  those in such  forward-looking  statements:
general economic conditions; general business conditions of customers
served  and other shifts in market demand; increases in domestic  and
international  competition;  pricing  pressures,  rate   levels   and
capacity  in the motor-freight industry; future operating costs  such
as  employee wages and benefits, fuel prices and workers compensation
and   self-insurance   claims;   shortages   of   drivers;   weather;
environmental  and  tax matters; changes in governmental  regulation;
technology  costs;  legal  claims;  timing  and  amount  of   capital
expenditures;  and successful execution of operating plans,  customer
service   initiatives,  marketing  plans,  process  and   operational
improvements and cost reduction efforts.


ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

     The  Company  is subject to market risks related to  changes  in
interest  rates  and foreign currency exchange rates,  primarily  the
Canadian  dollar  and  Mexican peso.  Management  believes  that  the
impact on the Company's financial position, results of operations and
cash  flows from fluctuations in interest rates and foreign  currency
exchange rates would not be material.  Consequently, management  does
not  currently  use  derivative instruments to  manage  these  risks;
however, it may do so in the future.


                     PART II. OTHER INFORMATION


ITEM 1.  Legal Proceedings

      As  previously disclosed, the Company has received notices from
the Environmental Protection Agency (EPA) and others that it has been
identified  as  a  potentially  responsible  party  (PRP)  under  the
Comprehensive  Environmental Response Compensation and Liability  Act
(CERCLA) or other Federal and state environmental statutes at various
Superfund sites. Under CERCLA, PRP's are jointly and severally liable
for all site remediation and expenses. Based upon the advice of local
environmental  attorneys and cost studies performed by  environmental
engineers hired by the EPA (or other Federal or State agencies),  the
Company believes its obligations with respect to such sites would not
have  a  material adverse effect on its financial position or results
of operations.


ITEM 4.  Submission of Matters to a Vote of Security Holders

      At  the  Annual  Shareholders Meeting held May  15,  2001,  the
following matters were presented with the indicated voting results:

      For  the purpose of electing members of the Board of Directors,
the votes representing shares of Common stock were cast as follows:

                 Nominee                  For          Withheld
            Patrick H. Blake         18,587,993       1,531,027
            Paul B. Guenther         19,489,769         629,251
            William D. Walsh         19,414,998         704,022

Because  the terms of office for their classes of directors  had  not
ended,  the  following  directors did  not  stand  for  election  and
continued in office after the Annual Shareholders Meeting: Robert  W.
Hatch,  G.  Robert  Evans, James B. Malloy, Henry C.  Montgomery  and
Raymond F. O'Brien.  As noted above, Raymond F. O'Brien resigned from
the Board of Directors on May 24, 2001.

    For the purpose of ratification of appointment of Arthur Andersen
LLP  as auditors, the votes representing shares of Common stock  were
cast as follows: For, 19,494,373; Against, 204,122; Abstain, 420,525.



ITEM 5.  Stockholder Proposals

     Pursuant to the Company's bylaws, stockholders who wish to bring
matters or propose nominees for director at the Company's 2002 annual
meeting  of  stockholders must provide specified information  to  the
Company  between January 18, 2002 and February 18, 2002 (unless  such
matters  are  included in the Company's proxy statement  pursuant  to
Rule 14a-8 under the Securities Exchange Act of 1934, as amended,  in
which  case  the  information  must be received  by  the  Company  by
December 3, 2001).


ITEM 6.  Exhibits and Reports on Form 8-K

       (a)  Exhibits

              10.1 Financing Agreement between General Electric Capital
                   Corporation and Consolidated Freightways Corporation
                   dated April 27, 2001, with amendments.

       (b)  Reports on Form 8-K

              No reports on Form 8-K were filed in the quarter ended
                June 30, 2001.




                             SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act  of
1934,  the  Company  (Registrant) has  duly  caused  this  Form  10-Q
Quarterly  Report  to  be signed on its behalf  by  the  undersigned,
thereunto duly authorized.


                                Consolidated Freightways Corporation
                                          (Registrant)


August 13, 2001                      /s/Robert E. Wrightson
                                     Robert E. Wrightson
                                     Executive Vice President and
                                      Chief Financial Officer


August 13, 2001                      /s/James R. Tener
                                     James R. Tener
                                     Vice President and Controller