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, 2001

    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 December 31, 2000 and 1999

  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
                       (Unaudited)

                           ASSETS

                                March 31,      September
                                                  30,
                                  2001           2000
                               (Unaudited)         *
  Current Assets
    Cash and cash
    equivalents                $304,823        $115,736
    Accounts receivable
                              5,848,753       5,757,204
    Inventory                    39,507          30,684
    Prepaid expenses and
    other current assets        732,169         285,057
    Deferred income taxes       103,840         103,840
                              ---------       ---------
  Total current assets        7,029,092       6,292,521

  Property, plant and
  equipment                   1,504,904       1,671,254
  Less:  Accumulated
  depreciation                  795,381         950,258
                              ---------       ---------
  Net property, plant and
  equipment                     709,523         720,996

  Goodwill                      535,848         567,681
  Other assets                  270,436         311,002
                              ---------       ---------
  Total assets               $8,544,899      $7,892,200
                              =========       =========

            LIABILITIES AND STOCKHOLDERS' EQUITY

  Current Liabilities
    Accounts payable         $3,486,299      $3,206,463
    Accrued expenses          1,140,350       1,405,221
    Short-term bank
     borrowings               1,100,000         900,000
    Income taxes payable         97,318          20,480
    Notes payable               155,439         162,843
                              ---------       ---------
  Total current liabilities   5,979,406       5,695,007

  Long term portion of notes
  payable                     2,576,937       2,624,530

  Stockholders' equity
  (deficit)
    Common stock
                                  3,251           3,251
    Foreign currency
    translation adjustment        1,987          (3,651)
    Retained earnings
    (deficit)                   (16,682)       (426,937)
                              ---------       ---------
  Total stockholders' equity    (11,444)       (427,337)

  Total liabilities and
  stockholders' equity       $8,544,899      $7,892,200
                             ==========       =========

 *  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,
                            2001       2000         2001          2000
                         ----------  ----------   -----------  -----------
Revenues (net of
discounts)              $11,560,713  $7,440,571   $23,781,744  $15,100,052
Cost of transportation    6,214,643   4,573,405    13,402,576    9,168,203
                         ----------  ----------   -----------  -----------
Gross profit              5,346,070   2,867,166    10,379,168    5,931,849

Selling, general and
administrative expenses   5,085,454   2,857,165     9,666,108    6,050,052
                         ----------  ----------   -----------  -----------
Income from operations      260,616      10,001       713,060     (118,203)

Other income (expense):
   Interest, net            (57,155)  ( 53,079)     ( 117,135)     (98,574)
   Gain/(loss) on sale
    of assets               157,711     (7,224)       160,011       (6,343)
   Other income/(expense)     6,250     (5,960)        17,232       (2,960)
                         ----------  ----------   -----------  -----------
Income before income tax
provision                   367,422    (56,262)       773,168     (226,080)

Provision for income
taxes                       173,530      5,464        362,912       20,464

Net income                 $193,892   $(61,726)      $410,256    $(246,544)
                         ==========  ==========   ===========  ===========
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)    $      .01   $     (.01)

Weighted average common
shares - diluted         32,509,872 32,522,872     32,510,812   32,522,872

Net income per common
share - diluted            $    .00 $     (.00)    $      .01   $     (.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  $(3,651)   $(426,937)   $(427,337)
 September 30, 2000

Other Comprehensive
 Income (Currency
 translation
 adjustment) for the
 six months ended
 March 31, 2001                             5,638                     5,638

Consolidated net
 income for the
 six months ended
 March 31, 2001                                        410,256      410,256
                    ___________   ______   _________  _________   _________

Balance at March
 31, 2001            32,509,872  $3,251   $ 1,987    $(16,682)   $(11,444)
                    ===========  ======  =========  =========   =========

</TABLE>

                                     5
<PAGE>

         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                         (Unaudited)

                                        Six Months Ended
                                             March 31,
                                         2001        2000
                                      --------     --------
  Cash flows from operating
  activities:
                                     $ 410,256    $(246,544)
  Adjustments to reconcile net
  income to net cash provided
    by operating activities:
      Depreciation                     119,729      100,216
      Amortization                      34,165       34,165
      Provision for doubtful
        accounts                        76,223       65,034
      (Gain)/loss on sale of assets   (160,011)       6,343
      Deferred income taxes
      (Increase) decrease in assets:
          Accounts receivable         (167,772)     (34,524)
          Prepaid expenses and other
            assets                    (455,935)      79,815
       Increase (decrease) in
        liabilities:
          Accounts payable and
           accrued expenses             14,965      398,774
          Income tax payable            76,837     (526,873)
                                      --------     --------
  Net cash provided by/used for
  operating activities                 (51,543)    (123,594)

  Cash flows from investing
  activities:
     Purchase of equipment            (123,983)    (134,754)
     Proceeds from sale of equipment   195,513       12,500
     Cash received from e-tail
      Logistics stock subscriptions      1,199            0
     Security deposits                  37,034        1,550
                                      --------     --------
  Net cash used for investing
  activities                           109,763     (120,704)

  Cash flows from financing
  activities:
     Repayments under notes payable    (74,771)    ( 58,321)
     Repayments under short-term
      bank borrowings                        0     (100,000)
     Borrowing under short-term bank
      borrowings                       200,000      400,000
                                      --------     --------
  Net cash used for/ provided by
   financing activities                125,229      241,679

  Net (decrease)/ increase in cash
  and cash equivalents                 183,449       (2,619)
  Currency translation adjustments       5,638        7,956
  Cash and cash equivalents,
   beginning of year                   115,736      406,842
                                      --------     --------
  Cash and cash equivalents, end of
   period                             $304,823     $412,179
                                      ========     ========



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, 2001

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 2000 Form 10-K
  filing dated December 28, 2000 (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, 2001 and 1999
  and the results of operations for the three and six months
  ended March 31, 2001 and 2000, respectively.

2.   Net income per common share appearing in the statements
  of operations for the three months and six months ended
  March 31, 2001 and 2000, 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.   On September 15, 2000, the Company discontinued freight
  operations at its UK branch location, Allstates Allcargo
  (UK) Ltd.  During the six months ended  March 31, 2001, the
  Company continued to collect accounts receivable and sold
  the remaining fixed assets.  Comparisons of profit and loss
  activity between the three month and six month periods ended
  March 31, 2001 and March 31, 2000, respectively, are
  impacted.







                                     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, distribution and sales
of safety equipment, and development and sales of audio-
visual products.  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 1,300 customers utilizing ground
transportation, commercial air carriers, and ocean vessels.
Allstates operates 21offices throughout the United States,
including Hawaii, and employs 98 people.

     Allstates has agreements with domestic and
international strategic partners and a network of agents
throughout the world.  In September, 2000, the Company
formed a strategic alliance with an established freight
forwarding company located in the United Kingdom, with its
principle office in the London Heathrow airport area.  This
strategic partner replaced the Company's UK branch office,
which had done business as Allstates Allcargo (UK) Ltd.
since January 1997.  The Company had decided to discontinue
freight operations at its branch office prior to the end of
its September 30, 2000 fiscal year end.

     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.  Allstates pays a
commission to this company based on the invoiced amount,
less deductions for transportation cost and a fee for
providing the service.


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,
                          2001        2000         2001      2000
                          ----        ----         ----      ----
Revenues                 100.0%      100.0%       100.0%    100.0%
Cost of  transportation   53.8        61.5         56.4      60.7
                          ----        ----         ----      ----
Gross profit              46.2        38.5         43.6      39.3

Selling, general and
 administrative expenses  44.0        38.4         40.6      40.1
Operating income           2.3         0.1          3.0      (0.8)
                          ----        ----         ----      ----
Net income                 1.7%       (0.8)%       1.7%      (1.6)%


Revenues

     Revenues  of  the Company represents gross consolidated
sales  less customer discounts. For the quarter ended  March
31,  2001,  revenues increased by $4,120,000, or  55.4%,  to
$11,561,000,  over  the  quarter  ended  March   31,   2000,


                                     8
<PAGE>

reflecting  an increase in the number of shipments  and  the
total weight of cargo shipped.   Revenues for the six months
ended  March 31, 2001 increased by $8,682,000, or 57.5%,  to
$23,782,000  as compared to the six-month period  end  March
31, 2000.

       A significant portion of the increases in revenue for
both  periods  is attributable to domestic and international
sales  generated from one customer that accounted for  10.8%
and  16.5%  of consolidated revenues for the three  and  six
months   ended  March  31,  2001,  respectively.    Although
Allstates  is confident in its ability to continue providing
freight  services to this customer, there is no  contractual
agreement  in  place,  and therefore  the  Company  can  not
guarantee that this business will continue indefinitely.  In
addition,  one  other customer accounted for 9.1%  of  total
revenues during the three-month period ended March 31, 2001.
On  a pro forma basis, after discounting revenues earned  in
total  from these two significant customers during the three
month  and  six  month periods ended March 31,  2001,  sales
increased  by  24.4%  and  23.6%  respectively,   over   the
comparative periods in the prior fiscal year.

     Domestic  revenues  increased  by  approximately   $2.9
million  or  54.1%,  to  $8,241,000 during  the  three-month
period  ended March 31, 2001, and increased by approximately
$5.8  million or 51.0%, to $17,307,000 during the six  month
comparative period.  In addition to revenues earned from the
two  significant customers, the growth in domestic sales  is
primarily  attributable  to new business  derived  from  the
Company's  service agreement with an unrelated  freight  and
warehouse   services   company  as   previously   described.
International sales increased during the three months  ended
March  31,  2001 by approximately $1.2 million or 58.6%,  to
$3,320,000,  and  during  the six month  comparative  period
increased  by  approximately  $2.8  million  or  78.0%,   to
$6,475.000, despite the closing of the Company's  UK  branch
in  September,  2000.   For comparison purposes,  net  sales
generated from the UK branch totaled approximately  $124,000
and  $301,000 respectively during the three and  six  months
ended  March  31,  2000.   Sales to international  customers
accounted  for  27.2% of total sales during the  six  months
ended  March  31, 2001 as compared to 24.1% of  total  sales
during the six months ended March 31, 2000.


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 decreased by 7.7%
for the three months ended March 31, 2001, in comparison  to
the  same period in the previous year, and decreased by 4.3%
for  the  six-month comparative period.   The  net  decrease
during  each  of the comparative periods in Fiscal  2001  is
primarily attributable to the new business derived from  the
Company's aforementioned service agreement with an unrelated
freight  and warehouse services company, as billing for  the
warehousing services portion of this business does not carry
a  related  cost of sales.  In addition, the  revenues  that
were earned from one of the previously mentioned significant
customers  had  a  favorable impact on  the  cost  of  sales
percentage  for the three months ended March 31,  2001.   In
absolute terms, the cost of sales increased by approximately
$1.6 million or 35.9%, to $6,215,000 during the three months
ended  March 31, 2001 versus the comparative period  in  the
prior  year, reflecting the increased sales volume.   During
the six month comparative period, cost of sales increased by
approximately $4.2 million or 46.2%, to $13,403,000.   Gross
margins increased for the three months ended March 31,  2001
to  46.2%, from 38.5% during the same period of the previous
year,  and  increased to 43.6% for the first six  months  of
Fiscal  2001  from  39.3%  during the  same  period  in  the
previous fiscal year.

        Gross  profit increased by $2,479,000 to  $5,346,000
for the three months ended March 31, 2001, and increased  by
$4,447,000 to $10,379,000 for the six months ended  on  that
date, in comparison to the prior year periods.


Selling, General and Administrative Expenses

     SG&A  expenses increased as a percentage  of  sales  by
5.6%  for the three months ended March 31, 2001 compared  to
the  three  months ended March 31, 2000, to 44.0%, primarily
reflecting  the  effect  of higher  commissions  paid  as  a

                                     9
<PAGE>

percent  of revenues during the period.  In absolute  terms,
operating  expenses increased by $2,228,000 or 78.0%  during
the  three-month period ended March 31, 2001 as compared  to
the  same period in the prior fiscal year.  The increase  in
SG&A  expenses  reflects the growth in  revenues  and  gross
profit  during the quarter, represented primarily by  higher
commissions expense, offset by the savings realized from the
discontinuation  of freight operations at the  Company's  UK
branch  in September, 2000.  Operating expenses incurred  by
the  Company's UK branch amounted to $134,000 for the  three
months ended March 31, 2000.

     Operating  expenses increased for the six months  ended
March  31, 2001 by $3,616,000, or 59.8% over the six  months
ended   March   31,   2000,  primarily   reflecting   higher
commissions expense resulting from the growth in revenue and
gross  profit  during  the period.   The  increase  in  SG&A
expense during this period was again offset by the resulting
savings  that  was  realized  from  the  discontinuation  of
operations at the UK branch at the end of Fiscal 2000.   For
the  six  months  ended March 31, 2000,  operating  expenses
incurred  by  the Company's UK branch amounted to  $269,000.
The  increase  in operating expenses during the  six  months
ended  March  31, 2001 was further offset by the  effect  of
certain  isolated  expenses that were  recorded  during  the
first  quarter  of  fiscal  2000 related  to  the  Company's
restructuring.

     Licensee   commissions   increased   by   approximately
$976,000  for the three-month period ended March  31,  2001,
and  increased by approximately $1,691,000 for the six-month
period  then ended, as compared to the same periods  in  the
prior fiscal year, driven by a higher level of gross profits
at  certain  licensee operations.  Much of the increases  in
licensee  commissions were derived from  the  gross  profits
generated from the significant customers that were mentioned
previously.   During Fiscal 2001 the Company has  also  paid
commissions to an unrelated freight and warehousing services
company  pursuant  to  an agreement made  between  them  and
Allstates.    Allstates  paid  approximately  $870,000   and
$1,623,000  respectively  in  commissions  to  this  company
during the three and six months ended March 31, 2001.

     SG&A  expenses  presented for the  three  months  ended
March  31,  2001  and 2000 are inclusive of expenditures  to
related parties totaling $175,054 and $71,269, respectively.
SG&A  expenses presented for the six months ended March  31,
2001  and  2000  are  inclusive of expenditures  to  related
parties totaling $367,699 and $346,069, respectively.


Income/(Loss) From Operations

     Income  from  operations  increased  during  the  three
months  ended  March 31, 2001 by approximately $251,000,  to
$261,000,  and  during the six months  ended  on  that  date
increased by approximately $831,000, to $713,000 as compared
to  the same three and six month period in the previous year
for the reasons indicated above.  Operating margins for both
the  three  and  six  month periods  ended  March  31,  2001
increased  by  2.2%,  to  2.3% and  3.0%,  respectively,  in
comparison to the same periods in the prior fiscal year.

Interest Expense and Income

     Net interest expense increased for the three months
ended March 31, 2001 by approximately $4,000, and increased
by approximately $19,000 during the six months then ended as
compared to the same periods in the previous year,
reflecting the increased level of borrowing on the Company's
bank line of credit.

Gain/(Loss) on Sale of Assets

     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 months and six months ended
March 31, 2001 was approximately $158,000 and $160,000,
respectively.

                                     10
<PAGE>

Net Income/(Loss)

     Income before income taxes increased to $367,000 during
the  quarter  ended March 31, 2001 from a  loss  of  $56,000
during  the  same  period in the prior  year.   The  Company
recorded  a tax provision of $174,000 for the quarter  ended
March 31, 2001 as compared to a tax provision of $5,000  for
quarter  ended  March  31, 2000.   Net  income  amounted  to
$194,000 or 1.7% of revenues in the second quarter of Fiscal
2001  versus a net loss of $62,000 or (0.8)% of revenues  in
the second quarter of Fiscal 2000.

     For  the six months ended March 31, 2001, income before
income  taxes increased to $773,000 from a loss of  $226,000
during  the  same period in the previous fiscal  year.   The
Company  recorded a tax provision of $363,000  for  the  six
months  ended March 31, 2001 as compared to a tax  provision
of  $20,000 for six-month period ended March 31, 2000.   Net
income  amounted  to $410,000 or 1.7% of  revenues  for  the
first  six  months  of  Fiscal 2001 versus  a  net  loss  of
$247,000 or (1.6)% of revenues for the same period of Fiscal
2000.

Liquidity and Capital Resources

     Net    cash   used   for   operating   activities   was
approximately  $52,000 for the six months  ended  March  31,
2001,   compared  to  cash  flow  used  for  operations   of
approximately  $124,000 for the six months ended  March  31,
2000.  During the six months ended March 31, 2001, cash  was
primarily provided by the net income of the Company, but was
offset  by an increase in accounts receivable as well  as  a
short  term  loan that was extended to an unrelated  freight
and  warehouse services company.  For the six  months  ended
March  31,  2000, cash was used primarily to satisfy  income
tax  obligations from fiscal 1999, offset by an increase  in
accounts payable.    Operating cash flows for the six months
ended  March  31,  2000 was negatively  impacted  by  losses
generated   by   the  Company's  UK  subsidiary,   Allstates
Allcargo, (UK) Ltd.

     At  March  31,  2001, the Company  had  cash  and  cash
equivalents   of  $305,000  and  net  working   capital   of
$1,050,000,  compared  with cash  and  cash  equivalents  of
$412,000  and  net working capital of $666,000 respectively,
at March 31, 2000.  The increase in working capital at March
31,  2001  over the respective period in 2000  is  primarily
attributable  to  the net income of the Company  during  the
prior  twelve month period, augmented by the discontinuation
of  freight  operations  at the  Company's  UK  branch.   In
addition,  the  sale  of company owned property  during  the
second quarter of Fiscal 2001 also had a positive effect  on
working capital.

     The  Company's investing activities were  comprised  of
expenditures  for capital equipment, primarily  representing
purchases  of  computer hardware and software,  as  well  as
company owned automobiles used by its sales representatives.
For   the   six   months  ended  March  31,  2001,   capital
expenditures  amounted to approximately $140,000,  of  which
approximately  $16,000 was acquired through  notes  payable.
For   the   six   months  ended  March  31,  2000,   capital
expenditures  amounted  to      approximately  $276,000,  of
which  approximately  $141,000 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.   Total  proceeds
from  the  sale of assets amounted to approximately $196,000
during the six months ended March 31, 2001.

     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 less .25% per annum (7.75% at March 31,  2001).
The interest rate is predicated on the Company maintaining a
compensating  account  balance  in  a  non-interest  bearing
account  equal to at least 15% 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, 2001,  there  was
$1,100,000 of outstanding borrowings on the line of credit.

     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


                                     11
<PAGE>

loan was secured by a $750,000 promissory note signed by the
borrower, and for which a Form UCC-1 financing statement was
filed.    At   March  31,  2001,  Allstates   had   advanced
approximately $674,000 to QLS.   In February 2001, QLS filed
for  Chapter  11 protection under the U.S. bankruptcy  laws.
Pursuant  to  the bankruptcy proceedings and  subsequent  to
March  31, 2001, another company, unrelated to Allstates
WorldCargo, Inc., made a bona fide  offer  to
purchase  the  assets  of QLS.  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.

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, 2000, 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 15, 2001
        ---------------------------------               ------------
          Sam DiGiralomo, President and CEO




BY:       /s/ Craig D. Stratton               DATED:    May 15, 2001
        ---------------------------------               ------------
          Craig D. Stratton, CFO, Secretary,
        Treasurer and Principal Financial Officer




                                      15