UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC   20549

                                FORM 10-Q

(Mark One)

XX  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO ______.


    Commission file number        000-24991
                             ____________________


                         ALLSTATES WORLDCARGO, INC.
     -------------------------------------------------------------------
     (Exact name of small business issuer as specified in its charter)


          New Jersey                            22-3487471
        --------------                 -------------------------------
  (State or other jurisdiction        (IRS Employer Identification No.)
     of incorporation)


           4 Lakeside Drive South, Forked River, New Jersey, 08731
          ----------------------------------------------------------
                 (Address of principal executive offices)


                             609-693-5950
            --------------------------------------------------
            (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act 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  XX      No
    ----         ----

The Company had 32,509,872 shares of common stock, par value $.0001 per
share, outstanding as of May 10, 2001.

                                     1
<PAGE>

            ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES


                              INDEX

                                                                       PAGE
PART 1.   FINANCIAL INFORMATION                                        ----

  ITEM 1.   FINANCIAL STATEMENTS

   Financial Statements with Supplemental Information
   For the Period Ending March 31, 2002 and 2001

  Financial Statements:

    Condensed Consolidated Balance Sheet.................................3

    Condensed Consolidated Statement of Operations.......................4

    Condensed Consolidated Statements of
        Stockholders' Equity (Deficit)...................................5

    Condensed Consolidated Statement of Cash Flows.......................6

  Notes to the Financial Statements......................................7


   ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS........................8

PART II.  OTHER INFORMATION.............................................13

   ITEM 1    LEGAL PROCEEDINGS..........................................13

   ITEM 2    CHANGES IN SECURITIES AND USE OF PROCEEDS..................13

   ITEM 3    DEFAULTS ON SENIOR SECURITIES..............................13

   ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........13

   ITEM 5    OTHER INFORMATION..........................................13

   ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K...........................13

      SIGNATURES........................................................15


                                     2

<PAGE>


         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

            CONDENSED CONSOLIDATED BALANCE SHEET

                           ASSETS

                                 March 31,     September
                                                  30,
                                  2002           2001
                               (Unaudited)         *
  Current Assets
    Cash and cash
      equivalents            $   450,696   $    623,925
    Accounts receivable        4,140,876      4,164,432
    Prepaid taxes                125,844         48,977
    Prepaid expenses and
    other current assets         800,378        774,129
    Deferred income taxes        118,038        118,038
    Loan receivable -
    related party                200,000        200,000
                              ----------     ----------
  Total current assets         5,835,832      5,929,501

  Property, plant and
  equipment                    1,344,159      1,452,999
  Less:  Accumulated
  depreciation                   864,447        857,592
                              ----------     ----------
  Net property, plant and
  equipment                      479,712        595,407

  Goodwill                       504,016        504,016
  Other assets                    60,872         65,753
                              ----------     ----------
  Total assets                $6,880,432     $7,094,677
                              ==========     ==========

            LIABILITIES AND STOCKHOLDERS' EQUITY

  Current Liabilities
    Accounts payable          $2,664,356     $2,562,260
    Accrued expenses             720,106      1,016,270
    Short-term bank
    borrowings                   900,000        900,000
    Notes payable                115,532        131,325
    Deferred tax liability         4,038          4,038
                              ----------     ----------
  Total current liabilities    4,404,032      4,613,893

  Long term portion of notes
  payable                      2,455,951      2,496,904

    Stockholders' equity
    (deficit)
    Common stock                   3,251          3,251
    Retained earnings
    (deficit)                     17,198        (19,371)
                              ----------     ----------
  Total stockholders' equity      20,449        (16,120)

  Total liabilities and
  stockholders' equity        $6,880,432     $7,094,677
                              ==========     ==========

 *  Condensed from audited financial statements.

     The accompanying notes are an integral part of these
consolidated financial statements.


                               3
<PAGE>

         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                         (Unaudited)

                           Three Months Ended        Six Months Ended
                               March 31,                 March 31,
                            2002       2001         2002          2001
                         ----------  ----------   -----------  -----------
Revenues (net of
discounts)              $ 7,788,839 $11,560,713   $16,140,067  $23,781,744
Cost of transportation    4,714,649   6,214,643     9,816,891   13,402,576
                         ----------  ----------   -----------  -----------
Gross profit              3,074,190   5,346,070     6,323,176   10,379,168

Selling, general and
administrative expenses   2,987,675   5,085,454     6,147,824    9,666,108
                         ----------  ----------   -----------  -----------
Income from operations       86,515     260,616       175,352      713,060

Other income (expense):
   Interest, net            (52,103)  ( 57,155)      (105,642)    (117,135)
   Gain/(loss) on sale
    of assets                (5,052)   157,711         (7,563)     160,011
   Other income                  39      6,250          1,455       17,232
                         ----------  ----------   -----------  -----------
Income before income tax
provision                    29,399    367,422         63,602      773,168

Provision for income
taxes                        12,533    173,530         27,033      362,912

Net income                 $ 16,866   $193,892       $ 36,569    $ 410,256
                         ==========  ==========   ===========  ===========
Weighted average common
shares - basic           32,509,872 32,509,872     32,509,872   32,509,872

Net income per common
 share - basic             $    .00 $      .00     $      .00   $      .01

Weighted average common
shares - diluted         32,509,872 32,509,872     32,509,872   32,510,812

Net income per common
share - diluted            $    .00 $      .00     $      .00   $      .01


The accompanying notes are an integral part of these
consolidated financial statements.



                                     4
<PAGE>



         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

  CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                          (DEFICIT)
                         (Unaudited)

<TABLE>
<S>                 <c>           <c>      <c>      <c>         <c>
                            Common Stock
                                             Other    Retained     Total
                        Number             Comprehen  Earnings  Stockholders'
                          of        Par      sive     (Deficit)    Equity
                        Shares     Value    Income                (Deficit)
                                            (Loss)
                    ___________   ______   _________  _________   _________

Balance at           32,509,872    3,251  $     0    $( 19,371)   $(16,120)
 September 30, 2001


Consolidated net
 income for the
 six months ended
 March 31, 2002                                         36,569      36,569
                    ___________   ______   _________  _________   _________

Balance at March
 31, 2002            32,509,872  $3,251   $     0    $ 17,198    $  20,449
                    ===========  ======  =========  =========    =========

</TABLE>

                                     5
<PAGE>






         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                         (Unaudited)

                                        Six Months Ended
                                            March 31,
                                         2002       2001
  Cash flows from operating
  activities:
  Net income                            36,569      410,256
  Adjustments to reconcile net
  income to net cash provided
    by operating activities:
      Depreciation                     110,625      119,729
      Amortization                       2,332       34,165
      Provision for doubtful
       accounts                         55,853       76,223
      (Gain)/loss on sale of assets      7,563     (160,011)
      Deferred income taxes
      (Increase) decrease in assets:
          Accounts receivable          (32,297)    (167,772)
          Prepaid expenses and other
           assets                     (103,116)    (455,935)
       Increase (decrease) in
        liabilities:
          Accounts payable and
           accrued expenses           (194,069)      14,965
          Income tax payable                         76,837
                                      ---------    --------
  Net cash used for by operating
  activities                          (116,540)     (51,543)

  Cash flows from investing
  activities:
     Purchase of equipment             (33,596)    (123,983)
     Proceeds from sale of property
     and equipment                      31,103      195,513
    Cash received from e-tail
    Logistics stock subscriptions                     1,199
     Security deposits                   2,550       37,034
                                      ---------    --------
  Net cash provided by investing
  activities                                57      109,763

  Cash flows from financing
  activities:
     Repayments under notes payable    (56,746)     (74,771)
     Repayments under short-term
     bank borrowings
     Borrowing under short-term bank
     borrowings                                     200,000
  Net cash (used for)/provided by
  financing activities                 (56,746)     125,229

  Net (decrease)/increase in cash
  and cash equivalents                (173,229)     183,449
  Currency translation adjustments                    5,638
  Cash and cash equivalents,
  beginning of year                    623,925      115,736
                                      ---------    --------
  Cash and cash equivalents, end of
  period                             $ 450,696    $ 304,823
                                     =========    =========





         The accompanying notes are an integral part of
these consolidated financial statements.



                                     6
<PAGE>


         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       March 31, 2002

1.   The accompanying unaudited condensed consolidated
  financial statements have been prepared by Allstates
  WorldCargo, Inc. (the "Company") in accordance with the
  rules and regulations of the Securities and Exchange
  Commission (the "SEC") for interim financial statements and
  accordingly do not include all information and footnotes
  required under generally accepted accounting principles for
  complete financial statements.  The financial statements
  have been prepared in conformity with the accounting
  principles and practices disclosed in, and should be read in
  conjunction with, the annual financial statements of the
  Company included in the Company's Fiscal year 2001 Form 10-K
  filing dated December 28, 2001 (File No. 000-24991).  In the
  opinion of management, these interim financial statements
  contain all adjustments necessary for a fair presentation of
  the Company's financial position at March 31, 2002 and 2001,
  and the results of operations for the three and six months
  ended March 31, 2002 and 2001, respectively.

2.   Net income per common share appearing in the statements
  of operations for the three and six months ended March 31,
  2002 and 2001, respectively have been prepared in accordance
  with Statement of Financial Accounting Standards No. 128
  ("SFAS No. 128").  SFAS No. 128 establishes standards for
  computing and presenting earnings per share ("EPS") and
  requires the presentation of both basic and diluted EPS.  As
  a result primary and fully diluted EPS have been replaced by
  basic and diluted EPS.  Such amounts have been computed
  based on the profit or (loss) for the respective periods
  divided by the weighted average number of common shares
  outstanding during the related periods.

3.   Beginning with the quarter ended December 31, 2001,
  the financial statements of the Company have been prepared
  in accordance with FASB Statement No. 142, Accounting for
  Goodwill and Intangible Assets, which no longer allows for
  the amortization of goodwill.  The new statement will
  require the Company to conduct an annual goodwill impairment
  test and write off any decrease in the fair value of the
  goodwill in the period of such declined value.


                                     7
<PAGE>


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

General Overview

     Allstates WorldCargo, Inc. (the "Company" or
"Allstates") is a New Jersey Corporation formed on January
14, 1997 as Audiogenesis Systems, Inc. ("Audiogenesis"),
pursuant to a corporate reorganization of Genesis Safety
Systems, Inc.  On August 24, 1999, Audiogenesis acquired 100
percent of the common stock of Allstates Air Cargo, Inc. in
a reverse acquisition, and on November 30, 1999, changed its
name to Allstates WorldCargo, Inc.  The Company's business
is comprised of freight forwarding and the distribution and
sales of safety equipment.  Allstates is headquartered in
Forked River, New Jersey.

     The freight forwarding business of Allstates opened its
first terminal in Newark, New Jersey in 1961.  Allstates
provides domestic and international freight forwarding
services to over 1,500 customers utilizing ground
transportation, commercial air carriers, and ocean vessels.
Allstates operates 20 offices throughout the United States,
and employs 87 people.

     Allstates has agreements with domestic and
international strategic partners and a network of agents
throughout the world.  Allstates plans to increase its
global market share by forming additional strategic
alliances and effecting selective acquisitions.

     In September, 2000, Allstates entered in to an
agreement with an unrelated freight and warehousing company
to provide them services which primarily include customer
invoicing and transportation vendor disbursements on
business that they provide to the Company.  Per the
agreement, Allstates paid a commission to this company based
on the invoiced amount, less deductions for transportation
cost and a fee for providing the service.  In May, 2001, the
assets of that company were purchased by another company
unrelated to Allstates WorldCargo, Inc., and consequently
the service agreement was terminated.


Results of Operations

     The   following  table  sets  forth  for  the   periods
indicated  certain financial information  derived  from  the
Company's consolidated statement of operations expressed  as
a percentage of net sales:


                          Three Months Ended       Six Months Ended
                             March 31,                  March 31,
                          2002        2001         2002      2001
                          ----        ----         ----      ----
Revenues                 100.0%      100.0%       100.0%    100.0%
Cost of transportation    60.5        53.8         60.8      56.4
                          ----        ----         ----      ----
Gross profit              39.5        46.2         39.2      43.6

Selling, general and
 administrative expenses  38.4        44.0         38.1      40.6
                          ----        ----         ----      ----
Operating income           1.1         2.2          1.1       3.0
                          ====        ====         ====      ====

Net income                 0.2%        1.7%        0.2%       1.7%


                                     8
<PAGE>

Revenues

     Revenues  of  the Company represents gross consolidated
sales  less  customer discounts. For the three months  ended
March  31, 2002, total revenues decreased by $3,772,000,  or
32.6%,  to  $7,789,000, from the three  month  period  ended
March 31, 2001, reflecting a reduced volume of shipments and
total  weight  of  cargo  shipped.   Revenues  decreased  by
$7,642,000, or 32.1%, to $16,140,0000 during the  six  month
period  ended March 31, 2002 as compared to the  six  months
ended March 31, 2001.

       Comparative sales from the three month and six  month
periods   ended  March  31,  2001  included   domestic   and
international revenues that were generated from one customer
that  accounted  for 10.8% and 16.5% of total  sales  during
those  respective periods.  Effective October 1, 2001,  that
customer,  in  an effort to minimize their operating  costs,
began  utilizing  a  larger alternate freight  forwarder  to
service  their  international import  freight  requirements.
Import  sales  to  that customer amounted  to  approximately
$642,000  and  $1,834,000 during the  three  and  six  month
periods  ended  March  31,  2001.   Allstates  continues  to
provide   domestic  freight  forwarding  services  to   this
customer.   In addition, comparative revenue for  the  three
month  period ended March 31, 2001 included sales  generated
from one other customer, which Allstates no longer services,
that accounted for 9.1% of total revenue for that period.

     Domestic  revenues  decreased  by  approximately   $2.2
million  or  27.1%,  to  $6,010,000 during  the  three-month
period ended March 31, 2002 in comparison to the same period
in the prior year.  For the six month period ended March 31,
2002,  domestic  revenues decreased  by  approximately  $5.1
million or 29.3%, to $12,235,000 from the same period in the
previous  year.   Comparative sales for the  three  and  six
month  periods  ended March 31, 2001 included  approximately
$1.1  million and $2.2 million respectively, in new business
that  was derived from the Company's service agreement  with
an  unrelated  freight and warehouse services company.  That
agreement was terminated in May 2001 pursuant to the sale of
the  assets  of  that company to another unrelated  company.
International sales decreased during the three months  ended
March  31,  2002 by approximately $1.5 million or 46.4%,  to
$1,778,000,  and  during  the six month  period  then  ended
decreased  by  approximately  $2.6  million  or  39.7%,   to
$3,905,000, reflecting the loss of import business from  the
significant  customer  as previously  mentioned.   Sales  to
international customers accounted for 24.2% of  total  sales
during  the  six months ended March 31, 2002 as compared  to
27.2%  of total sales during the six months ended March  31,
2001.

     In  addition  to  the specific reasons that  have  been
mentioned  for the comparative decrease in revenues  between
the  three  and six month periods ended March 31,  2002  and
2001,  respectively, the Company's sales volume during those
periods  was  adversely effected by the catastrophic  events
that took place on September 11, 2001.


Gross Profit

     Gross  profit  represents the  difference  between  net
revenues  and  the  cost of sales.  The  cost  of  sales  is
composed  primarily  of  amounts  paid  by  the  Company  to
carriers  and  cartage agents for the  transport  of  cargo.
Cost  of sales as a percentage of revenues increased by 6.7%
for the three months ended March 31, 2002, and increased  by
4.4%  for the six month period then ended, in comparison  to
the  same  periods  in the previous year.   The  comparative
three  and  six  month periods of the previous  fiscal  year
yielded  a lower percentage cost of sales primarily  due  to
the  effect  of  the  business that  was  derived  from  the
Company's aforementioned service agreement with an unrelated
freight and warehouse services company, for which their  was
no  related cost of sales on the warehousing portion of that
billing.   As  previously  indicated,  that  agreement   was
terminated  in  May 2001.  In absolute terms,  the  cost  of
sales  decreased by approximately $1.5 million or 24.1%,  to
$4,715,000 during the three months ended March 31, 2002, and
by approximately $3.6 million or 26.8%, to $9,817,000 versus
the  comparative periods in the prior year,  reflecting  the
reduced  sales  volume.  Gross margins  decreased  to  39.5%
during  the quarter ended March 31, 2002 from 46.2%  in  the
same  quarter of the previous fiscal year, and decreased  to
39.2% during the six months then ended from 43.6% during the
comparative   period  of  the  prior  year.   Gross   profit
decreased  by approximately $2.3 million, to $3,074,000  for
the  three months ended March 31, 2002 versus the same three
months  of  the  prior year, and decreased by  approximately
$4.1 million, to $6,323,000 during the six month comparative
periods then ended.

                                     9
<PAGE>

Selling, General and Administrative Expenses

     SG&A  expenses decreased as a percentage  of  sales  by
5.6%  for the three months ended March 31, 2002 compared  to
the  three  months ended March 31, 2001, to 38.4%, primarily
reflecting the combination of lower commissions expense as a
percent of revenues during the period, offset by the  effect
of  lower sales volume in relation to fixed operating costs.
In   absolute   terms,  operating  expenses   decreased   by
approximately  $2,098,000 or 41.3%  during  the  three-month
period  ended March 31, 2002 as compared to the same  period
in  the  prior  fiscal year.  The decrease in SG&A  expenses
reflects  the  lower  volume of revenues  and  gross  profit
during   the   quarter,  primarily  represented   by   lower
commissions  expense, as well as the effect of certain  cost
saving initiatives executed by the Company.

     During  the six months ended March 31, 2002,  operating
expenses  decreased by 2.5% as compared to  the  six  months
ended  March  31,  2001,  to 38.1%, again  reflecting  lower
commissions expense in relation to revenues for the  period,
offset  by  lower  sales  in  relation  to  fixed  operating
expenses.    Actual   operating   expenses   decreased    by
approximately  $3,518,000 or 36.4%  during  the  six  months
ended March 31, 2002 in comparison to the same period of the
previous  year, for the same reasons indicated in the  three
month comparison.

     Commissions    paid   to   licensees    decreased    by
approximately $686,000 and $1,046,000 respectively  for  the
three  and  six  month  periods  ended  March  31,  2002  in
comparison  to  the  same  periods  in  the  previous  year,
reflecting  the  reduced level of gross profits  at  certain
licensee  operations.  Additionally, during the  comparative
three and six month periods ended March 31, 2001 the Company
paid approximately $870,000 and $1,623,000  respectively  in
commissions to an unrelated freight and warehousing services
company  pursuant  to  an agreement made  between  them  and
Allstates.   That agreement was subsequently  terminated  in
May 2001.

     Since the fourth quarter of fiscal 2001, Allstates  has
taken steps to reduce operating expenses in response to  the
lower volume of sales.  The Company reduced headcount at two
locations, consolidated the operations of one of its offices
with  another station, and eliminated three positions within
the  corporate staff.  The Company realized cost savings  of
approximately $150,000 during the three months  ended  March
31,  2002 and approximately $280,000 for the six months then
ended as a result of these initiatives.

     SG&A  expenses  presented for the  three  months  ended
March  31,  2002  and 2001 are inclusive of expenditures  to
related    parties   totaling   $113,607    and    $192,646,
respectively.  For the six months ended March 31,  2002  and
2001,  expenditures to related parties totaled $113,607  and
$192,646, respectively.

Income/(Loss) From Operations

     Income  from  operations  decreased  during  the  three
months  ended  March 31, 2002 by approximately $174,000,  to
$87,000,   and  decreased  by  approximately  $538,000,   to
$175,000,  as  compared  to the same  three  and  six  month
periods  in  the  previous year for  the  reasons  indicated
above.   Operating margins for both the three and six  month
periods  ended  March 31, 2002 decreased by  1.1%  and  1.9%
respectively  in  comparison to the  respective  periods  in
fiscal 2001, to 1.1% of sales.

Net Interest Expense

     Net interest expense decreased for the three and six
month periods ended March 31, 2002 by approximately $5,000
and $11,000 respectively, as compared to the same periods in
the previous year, reflecting the effect of lower interest
rates on the Company's bank line of credit.

                                     10
<PAGE>

Gain/(Loss) on Sale of Assets

      During the prior fiscal year's quarter ended March 31,
2001, Allstates realized a gain on the sale of property that
the  Company co-owned with the Chairman, Joseph Guido.   The
property  was sold on January 11, 2001 and the  proceeds  of
the  sale  were  allocated between Mr. Guido  and  Allstates
WorldCargo.  The Company's portion of the net proceeds after
closing   costs  was  $184,005.98,  of  which  a   gain   of
approximately $153,000 was realized.  The total gain on  the
sale of assets for the three and six months ended March  31,
2001 was approximately $158,000 and $160,000, respectively.

Net Income/(Loss)

     Income  before income taxes decreased to $29,000 during
the  quarter ended March 31, 2002 from $367,000  during  the
same  period  in  the  prior year.  The Company  recorded  a
provision for taxes of approximately $13,000 for the quarter
ended  March  31,  2002 as compared to a  tax  provision  of
$174,000  for quarter ended March 31, 2001.  The net  profit
amounted to approximately $17,000 or 0.2% of revenues during
the  second  quarter of Fiscal 2002 versus a net  profit  of
$194,000 or 1.7% of revenues in the second quarter of Fiscal
2001.

     For  the six months ended March 31, 2001, income before
income  taxes decreased to $64,000 from $773,000 during  the
same  period  in  the  prior year.  The Company  recorded  a
provision  for taxes of approximately $27,000  for  the  six
months  ended March 31, 2002 as compared to a tax  provision
of  $363,000 for six months ended March 31, 2001.   The  net
profit amounted to approximately $37,000 or 0.2% of revenues
during  the  first six months of Fiscal 2002  versus  a  net
profit  of $410,000 or 1.7% of revenues for the same  period
in Fiscal 2001.



Liquidity and Capital Resources

     Net    cash   used   for   operating   activities   was
approximately  $117,000 for the six months ended  March  31,
2002,  while  cash  used  for operations  was  approximately
$52,000 for the six months ended March 31, 2001.  During the
six months ended March 31, 2002, cash was primarily used  to
satisfy  trade accounts payable and income tax  obligations,
offset by the net income of the Company.  For the six months
ended March 31, 2001, cash was used primarily to finance  an
increase  in accounts receivable and to extend a short  term
loan to an unrelated freight and warehouse services company,
offset by the net income of the Company.

     At  March  31,  2002, the Company  had  cash  and  cash
equivalents   of  $451,000  and  net  working   capital   of
$1,432,000,  compared  with cash  and  cash  equivalents  of
$305,000 and net working capital of $1,050,000 respectively,
at March 31, 2001.  The increase in working capital at March
31,  2002  over March 31, 2001 is attributable  to  the  net
income  of the Company during the prior twelve month  period
in  addition to the reclassification of an officer's loan as
a current receivable.

     The  Company's investing activities were  comprised  of
expenditures  for capital equipment, primarily  representing
purchases  of computer hardware and software.  For  the  six
months  ended March 31, 2002, capital expenditures  amounted
to  approximately $34,000.  For the six months  ended  March
31,  2001,  capital expenditures amounted  to  approximately
$140,000,  of  which  approximately  $20,000  was   acquired
through  notes  payable.  In March 2001, Allstates  received
proceeds  from  the sale of real estate that  was  partially
owned by the Company totaling approximately $184,000.

     The  Company  has a commercial line of  credit  with  a
bank,  pursuant  to  which  the Company  may  borrow  up  to
$2,000,000,  based on a maximum of 70% of eligible  accounts
receivable.   Per  the  agreement, interest  on  outstanding
borrowings  accrues at the Wall Street Journal's prime  rate
of interest (4.75% at March 31, 2002).  The interest rate is
predicated on the Company maintaining a compensating account
balance in a non-interest bearing account equal to at  least
10%  of  the outstanding principal balance.  If such average
compensating balances are not maintained, the interest  rate
will increase by 1% over the rate currently accruing.  As of
March 31, 2002, there was $900,000 of outstanding borrowings
on the line of credit.

                                     11
<PAGE>

     In  September,  2000, Allstates extended  an  operating
loan to an unrelated freight and warehouse services company,
Q Logistics Solutions, Inc. ("QLS"), as part of an agreement
that  the Company entered into to provide customer invoicing
and vendor disbursement services.  The loan was secured by a
$750,000  promissory note signed by the  borrower,  and  for
which  a  Form  UCC-1  financing statement  was  filed.   In
February 2001, QLS filed for Chapter 11 protection under the
U.S.   bankruptcy   laws.   Pursuant   to   the   bankruptcy
proceedings,   another  company,  unrelated   to   Allstates
WorldCargo, Inc., purchased the assets of QLS in  May  2001.
Allstates  had  outstanding loan advances  of  approximately
$702,000 to QLS prior to the purchase.  As a contingency  of
that purchase, Allstates entered in to an agreement with the
other  company  whereby Allstates assigned  the  Form  UCC-1
filing  to  them  in  exchange for  their  promissory  note,
secured  by a personal guarantee made by an officer of  that
company,  to  pay  the  full loan  amount  of  approximately
$702,000,  plus  9% interest over six months,  beginning  in
April 2001.  The other company subsequently defaulted on the
loan  and  as  of the date of this filing has not  made  any
payments to Allstates.  Allstates has filed suit against the
other  company for breach of contract, and will continue  to
pursue  the matter.  No assurance can be made at  this  time
with  respect to the recoverability of any or all funds  due
to Allstates.

Forward Looking Statements

The  statements  contained in all  parts  of  this  document
including,  but  not  limited  to,  those  relating  to  the
availability of cargo space; the Company's overseas presence
and  the  plans  for,  effects, results  and  expansion   of
international  operations and agreements  for  international
cargo; future international revenue and international market
growth;  the  future expansion and results of the  Company's
terminal  network;  plans for local  delivery  services  and
truck   brokerage;  future  improvements  in  the  Company's
information  systems  and  logistic  systems  and  services;
technological   advancements;  future   marketing   results;
construction   of  the  new  facilities;   the   effect   of
litigation; future costs of transportation; future operating
expenses;  future margins; any seasonality of the  Company's
business; future dividend plans; future acquisitions and the
effects,  benefits, results, terms or other aspects  of  any
acquisition,   effects  of  the  Year  2000   issue;   Ocean
Transportation  Intermediary License;  ability  to  continue
growth  and  implement  growth and  business  strategy;  the
ability  of expected sources of liquidity to support working
capital   and   capital  expenditure  requirements;   future
expectations;  and  any  other statements  regarding  future
growth,   future   cash  needs,  future  terminals,   future
operations,   business  plans,  future  financial   results,
financial targets and goals; and any other statements  which
are  not  historical  facts are forward-looking  statements.
When   used   in  this  document,  the  words  "anticipate,"
"estimate," "expect," "may," "plans," "project" and  similar
expressions  are  intended to be among the  statements  that
identify forward-looking statements. Such statements involve
risks  and  uncertainties, including, but  not  limited  to,
those relating to the Company's dependence on its ability to
attract and retain skilled managers and other personnel; the
intense   competition  within  the  freight  industry;   the
uncertainty of the Company's ability to manage and  continue
its   growth  and  implement  its  business  strategy;   the
Company's dependence on the availability of cargo  space  to
serve  its customers; the effects of regulation; results  of
litigation; the Company's vulnerability to general  economic
conditions;   the   control  by  the   Company's   principal
shareholder;   risks  of  international  operations;   risks
relating to acquisitions; the Company's future financial and
operating  results, cash needs and demand for its  services;
and  the  Company's  ability to  maintain  and  comply  with
permits  and licenses, as well as other factors detailed  in
this  document  and  the Company's other  filings  with  the
Securities  and Exchange Commission. Should one or  more  of
these   risks  or  uncertainties  materialize,   or   should
underlying assumptions prove incorrect, actual outcomes  may
vary materially from those indicated. The Company undertakes
no  responsibility to update for changes related to these or
any other factors that may occur subsequent to this filing.

                                     12
<PAGE>

PART II

OTHER INFORMATION
------------------

ITEM 1    LEGAL PROCEEDINGS

There have been no material developments concerning the
Company's involvement in an ongoing environmental proceeding as set forth
in the Company's Form 10-K dated September 30, 2001, and
such information is incorporated herein by reference.

ITEM 2    CHANGES IN SECURITIES

NONE


ITEM 3    DEFAULTS ON SENIOR SECURITIES

NONE


ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

NONE

ITEM 5    OTHER INFORMATION

NONE

                                      13


<PAGE>

ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

         None

     (b) Reports on Form 8-K

         None


                                      14


<PAGE>



SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


ALLSTATES WORLDCARGO, INC.


BY:       /s/ SAM DIGIRALOMO                  DATED:    May 14, 2002
        ---------------------------------               ------------
          Sam DiGiralomo, President and CEO




BY:       /s/ Craig D. Stratton               DATED:    May 14, 2002
        ---------------------------------               ------------
          Craig D. Stratton, CFO, Secretary,
        Treasurer and Principal Financial Officer




                                      15