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 September 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 October 31, 2001: 22,207,747




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

____________________________________________________________________________
____________________________________________________________________________

                                    INDEX



  PART I.  FINANCIAL INFORMATION                               Page

   Item 1. Financial Statements

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

            Statements of Consolidated Operations -
             Three and Nine Months Ended
             September 30, 2001 and 2000                         5

            Statements of Consolidated Cash Flows -
             Nine Months Ended September 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                                  16



 PART II.  OTHER INFORMATION

   Item 1.  Legal Proceedings                                   17

   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


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

ASSETS

CURRENT ASSETS
   Cash and cash equivalents                     $   31,435     $   46,523
   Trade accounts receivable, net of allowances     363,254        334,155
   Other receivables                                  5,483          8,742
   Operating supplies, at lower of average
     cost or market                                   7,424          8,419
   Prepaid expenses                                  39,431         41,286
   Deferred income taxes                             68,033         70,610
      Total Current Assets                          515,060        509,735

PROPERTY, PLANT AND EQUIPMENT, at cost
   Land                                              87,670         81,697
   Buildings and improvements                       354,904        350,137
   Revenue equipment                                527,391        518,086
   Other equipment and leasehold improvements       155,793        149,123
                                                  1,125,758      1,099,043
   Accumulated depreciation and amortization       (758,304)      (750,249)
                                                    367,454        348,794
OTHER ASSETS
   Deposits and other assets                         88,030         68,153
                                                     88,030         68,153

TOTAL ASSETS                                     $  970,544     $  926,682



      The accompanying notes are an integral part of these statements.



                    CONSOLIDATED FREIGHTWAYS CORPORATION
                              AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS



                                                     September 30, December 31,
                                                        2001         2000

                                                      (Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                                 $  99,053      $  97,741
   Accrued liabilities                                212,583        211,043
   Accrued claims costs                                85,252         86,674
   Federal and other income taxes                       2,677             --
   Short-term borrowings                               96,000             --
      Total Current Liabilities                       495,565        395,458

LONG-TERM LIABILITIES
   Long-term debt                                      15,100         15,100
   Accrued claims costs                                97,080         99,074
   Employee benefits                                  123,285        120,317
   Deferred income taxes                                9,953          6,282
   Other liabilities                                   44,834         38,267
      Total Liabilities                               785,817        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                          74,596         75,767
   Accumulated other comprehensive loss               (14,088)       (11,293)
   Retained earnings                                  133,266        200,067
   Treasury stock, at cost (1,058,937 and 1,436,712
     shares, respectively)                             (9,278)       (12,588)
       Total Shareholders' Equity                     184,727        252,184

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $ 970,544      $ 926,682



         The accompanying notes are an integral part of these statements.



<TABLE>
<CAPTION>
                     CONSOLIDATED FREIGHTWAYS CORPORATION
                              AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Dollars in thousands except per share amounts)


                                 For the Three                 For the Nine
                                  Months Ended                 Months Ended
                                  September 30,                September 30,
                                2001         2000           2001           2000

<S>                       <C>          <C>             <C>            <C>
REVENUES                   $   571,947  $   592,902     $ 1,736,940    $ 1,772,632


COSTS AND EXPENSES
  Salaries, wages and
    benefits                   381,181      372,923       1,146,796      1,130,554

  Operating expenses           113,164      109,279         340,123        336,040

  Purchased transportation      56,231       54,010         169,371        149,465

  Operating taxes and
    licenses                    17,079       16,932          49,910         53,492

  Claims and insurance          15,587       21,490          46,750         57,001

  Depreciation                  14,776       12,674          41,553         39,596

                               598,018      587,308       1,794,503      1,766,148

OPERATING INCOME (LOSS)        (26,071)       5,594         (57,563)         6,484

OTHER INCOME (EXPENSE)
   Investment income               167          339             557          1,231

   Interest expense             (2,334)      (1,273)         (6,227)        (3,580)

   Miscellaneous, net              236          (95)            (77)        (4,327)

                                (1,931)      (1,029)         (5,747)        (6,676)

Income (loss) before
   income taxes                (28,002)       4,565         (63,310)          (192)

Income taxes                     1,923        3,244           3,491          1,359

NET INCOME (LOSS)          $   (29,925) $     1,321     $   (66,801)   $    (1,551)

Basic average shares
  outstanding               22,045,529   21,507,159      21,929,171     21,439,193

Diluted average shares
  outstanding (a)           22,045,529   21,531,817      21,929,171     21,439,193


Basic Earnings (Loss)
   per Share:              $    (1.36)  $      0.06     $    (3.05)    $     (0.07)

Diluted Earnings (Loss)
   per Share:              $    (1.36)  $      0.06     $    (3.05)    $     (0.07)



<FN>

(a)  The  three  and  nine  months ended September 30,  2001  do  not  include
     229,093  and  325,445 potentially dilutive stock options, respectively,
     because to do so would be anti-dilutive. The three months ended September
     30, 2000 includes the dilutive effects of stock options.  The nine months
     ended September 30, 2000 does not include 8,219 potentially dilutive stock
     options, 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


                                                        Nine Months Ended
                                                          September 30,
                                                        2001         2000
                                                     (Dollars in thousands)

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

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                              (66,801)       (1,551)
Adjustments to reconcile net
  loss to net cash provided (used) by
  operating activities:
Depreciation and amortization                          48,380        44,779
Increase (decrease) in deferred income taxes            6,248       (33,862)
Gains from property disposals, net                    (24,508)      (11,849)
Issuance of common stock under stock
  and benefit plans                                     1,832         1,902
Changes in assets and liabilities
   Receivables                                        (25,840)       12,635
   Prepaid expenses                                     1,855         1,290
   Accounts payable                                     1,312       (13,446)
   Accrued liabilities                                  2,540        21,539
   Accrued claims costs                                (3,416)        2,577
   Income taxes                                         2,677           230
   Employee benefits                                    2,968         1,832
   Other                                                  774         5,117
   Net Cash Provided (Used) by Operating Activities   (51,979)       31,193

CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures                               (69,799)      (30,062)
   Software expenditures                               (2,451)       (5,114)
   Proceeds from sales of property                     12,834        19,536
   Acquisition of First Air, net of cash acquired          --        (1,176)
   Net Cash Used by Investing Activities              (59,416)      (16,816)

CASH FLOWS FROM FINANCING ACTIVITIES
   Net proceeds from (repayments of)
     short-term borrowings                             96,000          (691)
   Proceeds from exercise of stock options                307           --
   Purchase of common stock                                --          (267)
   Net Cash Provided (Used) by Financing Activities    96,307          (958)

Increase (Decrease) in Cash and Cash Equivalents      (15,088)       13,419

CASH AND CASH EQUIVALENTS, END OF PERIOD            $  31,435     $  62,469



      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 year's
financial statements have been reclassified to conform to the current
year presentation.


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                     Nine
                                Months Ended             Months Ended
                                September 30,            September 30,
                               2001      2000         2001         2000

Revenues
United States                $534,420  $555,917     $1,625,213   $1,663,169
Canada                         37,527    36,985        111,727      109,463
Total                        $571,947  $592,902     $1,736,940   $1,772,632


Geographic Information (continued)

                                        As of
                                     September 30,
                                   2001       2000

Property, Plant and Equipment
United States                    $334,000   $315,454
Canada                             33,454     36,337
Total                            $367,454   $351,791



3. Comprehensive Income (Loss)

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

(Dollars in thousands)
                                       Three                Nine
                                   Months Ended         Months Ended
                                   September 30,        September 30,
                                  2001       2000       2001     2000

Net Income (Loss)               $(29,925)  $1,321   $(66,801)  $(1,551)
Other comprehensive income
   (loss):
  Foreign currency
    translation adjustments       (1,377)      (5)    (2,795)      (68)
Comprehensive Income (Loss)     $(31,302)  $1,316   $(69,596)  $(1,619)


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  replaced a $155 million unsecured credit facility.  Letters
of  credit are limited to $100 million and borrowings are limited  to
an   agreed  upon  availability  calculation  of  eligible   accounts
receivable.  Borrowings bear interest at either the commercial  paper
rate  or  LIBOR, plus a margin (125 basis points as of September  30,
2001).  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). Subsequent amendments to the facility  provided  for
more  flexible  financial covenants, allowing the Company  to  be  in
compliance,  and  increased the margin on  borrowings  to  250  basis
points   effective   October  24,  2001.   Given   current   economic
uncertainties and the Company's operating performance, there  can  be
no  assurance  that  the  Company will  be  in  compliance  with  the
covenants  at  December  31, 2001, nor that  the  lender  will  grant
additional  amendments, if required.  As of September 30,  2001,  the
Company  had $96.0 million of short-term borrowings and $73.4 million
of  letters  of  credit outstanding.  Availability of  the  remaining
$30.6  million of borrowing capacity is dependent on the  calculation
of eligible accounts receivable.

     As a condition of a previous amendment, the Company was required
to  have $50 million of additional financing in place by October  15,
2001.   The  proceeds  were to be applied to  outstanding  short-term
borrowings under the facility.  In subsequent negotiations  with  the
lender,  the  requirement  to obtain the $50  million  of  additional
financing was waived.

      On  October 24, 2001, the Company entered into a six-month, $50
million revolving credit facility with the current lender, secured by
real  property, to provide for short-term working capital  needs  and
other  general corporate purposes.  Borrowings bear interest at LIBOR
plus 350 basis points.  Of the $50 million, $25 million was available
and  was  used  to reduce outstanding borrowings under the  Company's
existing  credit  facility  discussed  above.   Of  the  availability
created under the existing credit facility, $15 million was used  for
letter  of  credit needs and $10 million was restricted for  existing
credit  facility  needs.  The remaining $25  million  under  the  new
facility  will  be available on or after November 30, 2001,  provided
the  Company  achieves  a  minimum required EBITDA  (earnings  before
interest,  taxes, depreciation and amortization), as well as  minimum
load  factor  and revenue per hundredweight measures.  Given  current
economic uncertainties and the Company's operating performance, it is
unlikely that the Company will meet these measures in 2001 and  there
can  be no assurance that the Company will achieve these measures  in
2002.

      Please  refer  to  Management's  Discussion  and  Analysis  of
Financial  Condition and Results of Operations for an update  on  the
Company's liquidity.


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 losses during the  second  and
third  quarters, the Company recorded income tax benefits and related
deferred tax assets of $14.1 million and $11.5 million, respectively.
However, due to recent cumulative domestic losses, current accounting
standards  required valuation allowances of $14.1 million  and  $11.5
million  be  recorded  in  the  respective  quarters.    The  Company
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 September
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

      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 below.

      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.

      Reliance, the Company's insurer of record from October 1,  1996
to  October 1, 2000, has been placed in liquidation and may be unable
to  pay  $5 million the insurance carrier committed to plaintiffs  in
the  settlement  of  a  casualty case.  The  Company  maintains  that
plaintiffs accepted the risk of payment when they settled  the  case,
that  the  insurance  carrier with the next  layer  of  insurance  is
required  to make the payment if the liquidating carrier cannot,  and
that  otherwise there has been no settlement.  The Company is  unable
to  determine whether it will be liable for any portion of the excess
policy not paid and, if so, how much.

      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 September 30, 2001 decreased 3.5%
on a 0.8% decrease in tonnage, compared with the prior year.  Tonnage
decreased due primarily to the continued economic slowdown.   Revenue
per  hundredweight decreased 3.2% to $17.24, despite the benefits  of
an  August  rate increase, due to unfavorable changes in the  freight
mix, including a decrease in higher-rated expedited freight.  Revenue
per  hundredweight  was  also impacted by  a  decrease  in  the  fuel
surcharge  as  fuel  prices moderated during the quarter.   Shipments
increased 0.4% and the average weight per shipment decreased 1.2%  to
996  lbs.   Revenues for the nine-month period decreased  2.0%  on  a
tonnage  decrease of 1.7%.  The tonnage decrease reflects the  impact
of  the economic slowdown and the effects of severe winter weather in
the  first  quarter.   Revenue per hundredweight  decreased  1.0%  to
$17.42 for the reasons noted above.  Shipments decreased 1.5% and the
average weight per shipment decreased 0.3% to 996 lbs.

      Salaries, wages and benefits increased 2.2% in the quarter  and
1.4%  in  the nine-month period, despite lower tonnage, due primarily
to  a 3.4% contractual wage and benefit increase effective April  1st
and  sales  force  incentive  bonuses.  These  increased  costs  were
partially  offset  by  improved cross-dock and pick-up  and  delivery
efficiencies  as  a  result  of  process  improvement  programs,  and
headcount  reductions as management began adjusting the workforce  to
reflect  lower  business levels.   The prior year  nine-month  period
includes  $4.3  million  of severance pay due  to  an  administrative
reorganization.

      Operating expenses increased 3.6% in the quarter compared  with
the  prior year.  The quarter includes $4.8 million of gains on  sale
of  property compared with $8.8 million in the prior year.  Excluding
the  gains,  operating expenses were flat, despite lower tonnage  and
lower  fuel  costs per gallon.  For the nine-month period,  operating
expenses  increased 1.2%, despite lower tonnage.  Excluding gains  on
sale  of property of $24.5 million in the nine-month period and $11.8
million  in the prior year, operating expenses increased  4.8%.   The
quarter  and  nine-month  periods were impacted  by  increased  lease
expense  on  revenue  equipment, professional  services  expense  and
software  amortization.  The nine-month period was also  impacted  by
severe winter weather in January and February.  Operating expenses in
both  the  quarter  and nine-month period were  partially  offset  by
increased use of rail services.

     Purchased transportation increased 4.1% in the quarter and 13.3%
in  the  nine-month period due to increased use of rail  services  in
strategic  lanes.  Rail  miles as a percentage  of  inter-city  miles
increased  to  26.7% during the quarter compared with  25.4%  in  the
prior  year.   For  the nine- month period, rail miles  increased  to
27.3% compared with 23.4% in prior year.

      Operating  taxes and licenses increased 1.0%  in  the  quarter,
despite  lower tonnage, due primarily to property taxes  on  recently
purchased terminals.  Operating taxes and licenses decreased 6.7%  in
the nine-month period due primarily to lower tonnage.

     Claims and insurance decreased 27.5% in the quarter and 18.0% in
the  nine-month  period  due  to lower tonnage  and  improved  claims
experience.    The   Company  continued  to  benefit   from   process
improvement  programs  directed  at  reducing  freight   damage   and
increasing vehicular safety.

     Depreciation increased 16.6% in the quarter and 4.9% in the nine-
month   period  due  to  increased  capital  expenditures.    Capital
expenditures  were $69.8 million in the nine-month  period,  compared
with  $30.1  million in the prior year, and include the additions  of
terminal properties in Brooklyn, NY, Laredo, TX, and Phoenix, AZ,  as
well as revenue equipment previously under lease.

      The  operating loss for the quarter was $26.1 million  compared
with  an  operating profit of $5.6 million in the  prior  year.   The
operating  ratio  deteriorated to 104.6% from  99.1%.   The  Canadian
operations  contributed  $3.6 million  of  operating  income  in  the
quarter  compared  with  $3.5 million in the prior  year.   Excluding
gains  on sale of real property, the operating loss was $30.9 million
in  the  quarter compared with a $3.2 million operating loss  in  the
prior  year.  For the nine-month period, the operating loss was $57.6
million  compared  with an operating profit of $6.5  million  in  the
prior  year.  The operating ratio deteriorated to 103.3% from  99.6%.
The Canadian operations contributed $10.1 million of operating income
in  the  nine-month period compared with $9.6 million  in  the  prior
year.   Excluding gains on sale of real property, the operating  loss
for  the nine-month period was $82.1 million compared with a loss  of
$5.4 million in the prior year.

      Other  expense,  net,  increased $0.9 million  in  the  quarter
primarily due to increased interest expense on higher average  short-
term  borrowings.   The nine-month period, also  impacted  by  higher
interest expense on increased debt levels, decreased $0.9 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.
Excluding  the  settlement charge, other expense, net increased  $3.1
million in the nine-month period.

      The  Company's  effective tax rate differs from  the  statutory
federal  rate due to foreign taxes and the recording of deferred  tax
valuation allowances.  As a result of the domestic losses during  the
second  and third quarters, the Company recorded income tax  benefits
and  related deferred tax assets of $14.1 million and $11.5  million,
respectively.   However,  due to recent cumulative  domestic  losses,
current  accounting standards required valuation allowances of  $14.1
million  and  $11.5  million be recorded in the respective  quarters.
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
September  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.

      Due  to continued economic deterioration, the Company will  not
return   to  profitability  in  2001.   To  reduce  operating  costs,
management  is  continuing  with  aggressive  cost  control  measures
including  headcount  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.  In an  effort  to
improve  yields, the Company is reviewing its pricing, especially  in
the  under  500  lbs. weight bracket.  Additionally, the  Company  is
reviewing  the  pricing  of those contract  accounts  coming  up  for
renewal.   The  above improvements should help offset  a  contractual
wage  and  benefit  increase in April 2002 that is  expected  to  add
approximately $20 million of expense.

      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 928,000 restricted
shares  that had not achieved the pre-determined increases  in  stock
price  required  for vesting as of September 30, 2001.   Compensation
expense will be recognized for those shares if the stock price  meets
the required levels. Of the 928,000 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 fluctuations in 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  (FASB)
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 of this statement will not
have  material adverse affect on the Company's financial position  or
results of operations.

      Also  in  June  2001, the FASB issued SFAS 143 "Accounting  for
Asset  Retirement Obligations."  This standard will require that  the
fair  value  of  a  liability for an asset retirement  obligation  be
recognized  in  the period in which it is incurred  if  a  reasonable
estimate  of  the  fair  value  can be made.   The  associated  asset
retirement  costs will be capitalized as part of the carrying  amount
of the asset.  This statement is effective for fiscal years beginning
after  June  15,  2002.  The Company expects that  adoption  of  this
statement  will  not have material adverse affect  on  the  Company's
financial position or results of operations.

      In  August 2001, the FASB issued SFAS 144 "Accounting  for  the
Impairment  or  Disposal  of  Long-Lived  Assets."   This   statement
supercedes current accounting guidance relating to the impairment  of
long-lived assets and provides a single accounting methodology to  be
applied  to  all  long-lived  assets to  be  disposed  of,  including
discontinued  operations.  This statement  is  effective  for  fiscal
years  beginning  after December 15, 2001. The Company  is  currently
assessing the impact of adoption of this statement.


LIQUIDITY AND CAPITAL RESOURCES

Current Financing Requirements

      The  Company  currently projects that it  will  need  to  raise
approximately $30 million of financing to fund operations and support
letter  of  credit  requirements through December  31,  2001  and  an
additional $45 million in 2002.

      The  Company  believes  that it has a  reasonable  prospect  of
securing a $50 million revolving credit facility collateralized  with
accounts  receivable, real property and revenue equipment to  provide
for  working capital needs.  The Company expects funding over various
dates through December 31, 2001.  However, there can be no assurances
that the Company will be able to secure this financing.

      The  Company  is pursuing a number of options to  improve  both
short   and   long-term  liquidity.   The  Company  has   significant
unleveraged assets and is pursuing asset-backed borrowings, the  sale
of  surplus  real  properties  and the sale  and  leaseback  of  real
properties  and  revenue  equipment.     However,  there  can  be  no
assurance   that   the  Company  will  be  able  to  complete   these
transactions or that they will be on reasonable terms.

      During  the first week of November 2001, the Company  completed
the sale of 3 surplus properties.  It also anticipates completing the
sale  of  2 surplus properties by November 30, 2001 and is in  active
negotiations  to  sell 7 more.  The Company has the ability  to  sell
other   surplus  properties  with  an  aggregate  market   value   of
approximately $30 million.

     The  ability  of the Company to continue to fund operations  and
meet  its  obligations  as  they  come  due  will  be  dependent   on
accomplishing its financing initiatives and performance goals.


Existing Credit Agreements

      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 replaced a $155 million unsecured credit facility.   Letters
of  credit are limited to $100 million and borrowings are limited  to
an   agreed  upon  availability  calculation  of  eligible   accounts
receivable.  Borrowings bear interest at either the commercial  paper
rate  or  LIBOR, plus a margin (125 basis points as of September  30,
2001).  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). Subsequent amendments to the facility  provided  for
more  flexible  financial covenants, allowing the Company  to  be  in
compliance,  and  increased the margin on  borrowings  to  250  basis
points   effective   October  24,  2001.   Given   current   economic
uncertainties and the Company's operating performance, there  can  be
no  assurance  that  the  Company will  be  in  compliance  with  the
covenants  at  December  31, 2001, nor that  the  lender  will  grant
additional  amendments, if required.  As of September 30,  2001,  the
Company  had $96.0 million of short-term borrowings and $73.4 million
of  letters  of  credit outstanding.  Availability of  the  remaining
$30.6  million of borrowing capacity is dependent on the  calculation
of eligible accounts receivable.

     As a condition of a previous amendment, the Company was required
to  have $50 million of additional financing in place by October  15,
2001.   The  proceeds  were to be applied to  outstanding  short-term
borrowings under the facility.  In subsequent negotiations  with  the
lender,  the  requirement  to obtain the $50  million  of  additional
financing was waived.

      On  October 24, 2001, the Company entered into a six-month, $50
million revolving credit facility with the current lender, secured by
real  property, to provide for short-term working capital  needs  and
other  general corporate purposes.  Borrowings bear interest at LIBOR
plus 350 basis points.  Of the $50 million, $25 million was available
and  was  used  to reduce outstanding borrowings under the  Company's
existing  credit  facility  discussed  above.   Of  the  availability
created under the existing credit facility, $15 million was used  for
letter  of  credit needs and $10 million was restricted for  existing
credit  facility  needs.  The remaining $25  million  under  the  new
facility  will  be available on or after November 30, 2001,  provided
the  Company  achieves  a  minimum required EBITDA  (earnings  before
interest,  taxes, depreciation and amortization), as well as  minimum
load  factor  and revenue per hundredweight measures.  Given  current
economic uncertainties and the Company's operating performance, it is
unlikely that the Company will meet these measures in 2001 and  there
can  be no assurance that the Company will achieve these measures  in
2002.


Cash Flows for the Nine Months Ended September 30, 2001 and 2000

      As of September 30, 2001, the Company had $31.4 million in cash
and  cash equivalents. Net cash used by operating activities of $52.0
million in the nine-month period compares with $31.2 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.

      Net cash used by investing activities of $59.4 million compares
with  $16.8  million  in  the same period last  year.   The  increase
primarily  reflects the additions of terminal properties in Brooklyn,
NY,  Laredo,  TX,  and  Phoenix, AZ, as  well  as  revenue  equipment
previously under lease.  The Company expects capital expenditures  to
be  approximately $5 million for the remainder of the year, primarily
for  the  purchase of revenue equipment and real estate, but has  the
ability to defer these expenditures.

      Net  cash  provided by financing activities  of  $96.3  million
primarily  reflects  net short-term borrowings  under  the  Company's
credit  facility.  Net borrowings of $96.0 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.


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;  successful  execution  of  operating  plans,  customer
service   initiatives,  marketing  plans,  process  and   operational
improvements and cost reduction efforts and adequate financing.


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.

      Please  refer to Footnote 7 above for a discussion  of  certain
legal proceedings.


ITEM 6.  Exhibits and Reports on Form 8-K

       (a)  Exhibits

             10.1  Fourth Amendment to the Letter of Credit Agreement between
                    Consolidated Freightways Corporation and General Electric
                    Capital Corporation dated October 18, 2001.
             10.2  Fourth Amendment to the Securitization Agreement between
                    Consolidated Freightways Corporation and General Electric
                    Capital Corporation dated as of October 18, 2001.
             10.3  Fifth Amendment to the Letter of Credit Agreement between
                    Consolidated Freightways Corporation and General Electric
                    Capital Corporation dated October 24, 2001.
             10.4  Fifth Amendment to the Securitization Agreement between
                    Consolidated Freightways Corporation and General Electric
                    Capital Corporation dated as of October 24, 2001.

       (b)  Reports on Form 8-K

               A Form 8-K was filed on October 25, 2001 disclosing  a short-
               term  financing  arrangement between the  Company  and General
               Electric Capital Corporation.


                             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)


November 14, 2001                    /s/Robert E. Wrightson
                                        Robert E. Wrightson
                                        Executive Vice President and
                                          Chief Financial Officer


November 14, 2001                    /s/James R. Tener
                                        James R. Tener
                                        Vice President and Controller