FORM 10-Q

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


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


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


                  For the quarterly period ended June 30, 2001.

                           Commission File No. 1-8129.


                              US 1 INDUSTRIES, INC.
            (Exact name of registrant as specified in its charter)


          Indiana                                95-3585609
          _______                                __________

(State of Incorporation)                  (I.R.S. Employer Identification No.)



   1000 Colfax, Gary, Indiana                                   46406
   --------------------------                                   -----
(Address of principal executive offices)                      (Zip Code)

      Registrant's telephone number, including area code: (219) 944-6116
                                                          ______________


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

As of August 10, 2001, there were 10,618,224 shares of registrant's common
stock were outstanding.





<PAGE>


Part I  FINANCIAL INFORMATION


Item 1. FINANCIAL STATEMENTS.


                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000
<TABLE>
<CAPTION>
ASSETS
                                                    June 30,      December 31,
                                                      2001           2000
                                                      ----           ----
<S>                                               <C>           <C>
                                                   (Unaudited)
CURRENT ASSETS:
Accounts receivable-trade, less allowance for
    doubtful accounts of $372,000 and $209,000
    respectively                                   $9,934,210    $9,911,436
Other receivables                                     828,677       382,057
Deposits                                               82,950        40,450
Prepaid expenses                                      267,857       309,897
Current deferred tax asset                            400,000       400,000
                                                   -----------   ----------
      Total current assets                         11,513,694    11,043,840

FIXED ASSETS:
   Equipment                                        1,290,566      335,402
   Less accumulated depreciation and amortization    (139,828)     (68,797)
                                                    ----------   ----------
      Net fixed assets                              1,150,738      266,605
                                                    ----------  -----------
ASSETS HELD FOR SALE:
   Land                                               195,347       195,347
   Valuation allowance                               (141,347)     (141,347)
                                                    ----------  -----------
      Net assets held for sale                         54,000        54,000
 Non-current deposits                                 126,461       126,461
 Non-current deferred tax asset                       400,000       400,000
                                                    ----------  -----------
TOTAL ASSETS                                      $13,244,893   $11,890,906
                                                    ==========  ===========


<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>


<PAGE>
                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000

LIABILITIES AND SHAREHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>
                                                     June 30,     December 31,
                                                      2001           2000
                                                      ----           ----
                                                     (Unaudited)
CURRENT LIABILITIES:
<S>                                              <C>            <C>
   Short-term debt                               $ 5,633,560    $ 4,503,896
   Accounts payable                                3,118,936      2,621,107
   Bank overdraft                                    382,661        522,201
   Accrued expenses                                  209,944        244,446
   Insurance and claims                              265,936        418,450
   Accrued compensation                               39,313         33,891
   Accrued interest                                  908,684        836,019
   Fuel and other taxes payable                       40,235        143,796
                                                 -----------   ------------
      Total current liabilities                   10,599,269      9,323,806
                                                 -----------   ------------
LONG-TERM DEBT (primarily to related parties)      3,701,520      4,026,210

COMMITMENTS AND CONTINGENCIES

REDEEMABLE PREFERRED STOCK:
    Authorized 5,000,000 shares; no par value,
    Series A shares outstanding:
    2001 and 2000 - 1,094,224
    Liquidation preference $0.3125 per share       1,051,540      1,000,112
SHAREHOLDERS' DEFICIENCY:
   Common stock, authorized 20,000,000 shares;
    no par value; shares outstanding 10,618,224   40,844,296     40,844,296
   Accumulated deficit                           (42,951,732)   (43,303,518)
                                                 -----------     -----------
   Total shareholders' deficiency                 (2,107,436)    (2,459,222)
                                                 -----------     -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
    DEFICIENCY                                  $ 13,244,893    $11,890,906
                                                 ===========    ============



<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>




<PAGE>
                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
          THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)

<TABLE>
<CAPTION>
                                              Three Months Ended            Six Months Ended
                                              2001          2000            2001        2000
                                              ----          ----            ----        ----

<S>                                     <C>             <C>           <C>            <C>
OPERATING REVENUES                      $ 17,536,616    $11,593,128   $  32,987,624  $20,624,055
                                          ------------  ------------    ------------  -----------
OPERATING EXPENSES:
  Purchased transportation/commissions    15,498,732     10,068,434      29,045,930   17,891,217
  Insurance and claims                       458,451        308,244         868,734      632,872
  Salaries, wages, and other                 529,738        465,530       1,069,764      854,841
  Operating supplies and expense             575,820        343,015       1,056,606      506,416
  Other expenses                             169,491        125,912         309,866      219,663
                                          ------------  ------------    ------------  ----------
     Total operating expenses             17,232,232     11,311,135      32,350,900   20,105,009
                                          ------------  ------------    ------------  ----------
OPERATING INCOME                             304,384        281,993         636,724      519,046
                                          ------------  ------------    ------------  ----------
NON-OPERATING INCOME (EXPENSE):
  Interest income                                459         23,067           2,894       25,074
  Interest expense                          (166,040)      (160,956)       (372,956)    (326,631)
  Other income (expense)                      72,782         25,808         136,552       34,763
                                          ------------  ------------    ------------   ----------
     Total non-operating (expense)          ( 92,799)      (112,081)       (233,510)    (266,794)
                                          ------------  ------------    ------------   ----------
NET INCOME                              $    211,585     $  169,912   $     403,214   $  252,252
DIVIDENDS ON PREFFERRED SHARES               (25,714)       (23,143)        (51,428)     (46,286)
                                          -----------   ------------    ------------  -----------
NET INCOME AVAILABLE TO COMMON
SHARES                                       185,871        146,769         351,786      205,966
                                          ===========   ============    ============  ===========
EARNINGS PER COMMON SHARE -
  BASIC AND DILUTED                     $       0.02     $     0.01   $        0.03   $     0.02
                                          ============  ============    ============ ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES-
  BASIC AND DILUTED                       10,618,224     10,618,224      10,618,224    10,618,224
                                          ============  ============    ============ ============


<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>



<PAGE>
                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             JUNE 30, 2001 (UNAUDITED) AND JUNE 30, 2000 (UNAUDITED)

<TABLE>
<CAPTION>
                                                      Six Months Ended June 30,
                                                          2001        2000
                                                       __________   _________

                                                       (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                      <C>        <C>
Net Income                                               403,214    252,254
Adjustments to reconcile net income to net
  Cash used for operations:
  Depreciation and amortization                           71,031     10,859
  Provision for doubtful accounts                        162,297     23,328
  Changes in operating assets and liabilities:
    Accounts receivable - trade                         (185,071)(1,229,908)
    Other receivables                                   (446,620)  (321,607)
    Prepaid assets                                        42,040    (12,918)
    Deposits                                             (42,500)      (288)
    Accounts payable                                     497,829    371,768
    Accrued expenses                                     (34,502)    21,269
    Accrued interest                                      72,665     98,069
    Insurance and claims                                (152,514)    99,322
    Accrued compensation                                   5,422      1,699
    Fuel and other taxes payable                        (103,561)    13,406
                                                       ---------   --------
  Net Cash provided by(used in) operating activities     289,730   (672,747)
                                                       ---------   --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property and equipment                   (955,164)   (16,307)
                                                        --------   --------

   Net cash used in investing activities                (955,164)   (16,307)
                                                        --------   --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings(repayments)under line of credit         524,171   (877,606)
  Proceeds from equipment line of credit                 669,394          0
  Principal payments on long term debt                  (156,280)   (26,792)
  Net(repayment of) proceeds from shareholder loans     (232,311) 1,614,248
  Decrease in bank overdraft                            (139,540)   (20,796)
                                                       ---------   --------
  Net cash provided by financing activities              665,434    689,054
                                                       ---------   --------
NET INCREASE IN CASH                                           0          0
CASH, BEGINNING OF PERIOD                                      0          0
                                                        ---------  --------
CASH, END OF PERIOD                                            0          0
                                                        =========  ========

</TABLE>



<PAGE>

                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                     SIX MONTHS ENDED JUNE 30, 2001 AND 2000


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

1. BASIS OF PRESENTATION
     The accompanying  consolidated balance sheet as of June 30, 2001, and the
consolidated  statements  of  operations  and cash flows for the six month and
three month  periods ended June 31, 2001 and 2000 are  unaudited,  but, in the
opinion  of  management,   include  all  adjustments  (consisting  of  normal,
recurring  accruals)  necessary  for a  fair  presentation  of  the  financial
position and the results of operations for such periods.  The year-end balance
sheet data was derived from audited  financial  statements.  These  statements
should  be  read  in  conjunction  with  the  Company's  audited  consolidated
financial  statements  for the year ended  December  31,  2000,  and the notes
thereto  included  in the  Company's  annual  report  on  Form  10-K.  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted,  as  permitted by the  requirements  of the  Securities  and Exchange
Commission,  although the Company  believes that the  disclosures  included in
these   financial   statements  are  adequate  to  make  the  information  not
misleading.  The  results of  operations  for the six months and three  months
ended June 30, 2001 and 2000 are not necessarily indicative of the results for
a full year.

2. RECLASSIFICATIONS

     Certain  reclassifications have been made to the previously reported 2000
financial statement to conform with the 2001 presentation.

3. EARNINGS PER COMMON SHARE

     The Company  calculates  earnings per share  ("EPS") in  accordance  with
Statement  of  Financial  Accounting  Standards  No.  128.  Following  is  the
reconciliation  of the  numerators and  denominators  of the basic and diluted
EPS. There were no outstanding common stock equivalents in these periods.

<TABLE>
<CAPTION>
                                                       Six Months Ended
Numerator                                             2001           2000
                                                      ----           ----

<S>                                               <C>          <C>
       Net income                                 $ 403,214    $  252,252
       Dividends on preferred shares                (51,428)      (46,286)
                                                 ----------   ------------
 Net income available to common
        shareholders for basic and diluted EPS      351,786       205,966

Denominator
       Weighted average common shares            10,618,224    10,618,224
       outstanding for basic and diluted EPS

</TABLE>






<PAGE>

                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
          NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--(Continued)


4. SHORT-TERM DEBT
Short-term debt at June 30, 2001, and December 31, 2000, comprises:
<TABLE>
<CAPTION>
                                               June 30,         December 31,
                                                 2001               2000
                                              ----------         ----------
<S>                                         <C>               <C>
Line of credit                                 4,795,275         $4,271,104
Current portion of long-term debt                838,285            232,792
                                              ----------         ----------
         Total                                 5,633,560         $4,503,896
                                              ==========         ==========
</TABLE>

     The  Company  has a $5.5  million  line of  credit.  Advances  under  the
revolving  line of credit are limited to 70% of eligible  accounts  receivable
and bear  interest at the prime rate (6.75% at June 30,  2001).  The  interest
rate is  currently  based on certain  financial  covenants  and may range from
prime to prime plus .5%.  This line of credit  agreement  expires in September
2001.  Advances  under  the  agreement  are  collateralized  by the  Company's
accounts  receivable,  property,  and  other  assets.  Borrowings  of up to $1
million are  guaranteed  by the Chief  Executive  Officer and Chief  Financial
Officer of the Company.  At June 30, 2001, the outstanding  borrowings on this
line of credit were $4.80 million.

     In  addition  to the $5.5  million  line of credit,  the Company has also
established a separate line for equipment  financing  which was increased from
$500,000 to $1,000,000 in the first quarter of 2001. The principal  balance of
the Equipment Loan shall bear interest payable monthly,  in an amount equal to
the Prime  Rate in effect  plus 1% per  annum.  The  principal  balance on the
equipment  line is payable  monthly based on a five-year  amortization  of the
outstanding  balance.  The equipment line expires on May 15, 2002. At June 30,
2001,  the  outstanding  borrowings on the equipment  line,  which is included
above in the current portion of long-term debt, totaled $740,695.

     The lines of credit are subject to  termination  upon  various  events of
default,  including  failure to remit timely  payments of  interest,  fees and
principal, any adverse change in the business of the Company or the insecurity
of the lender  concerning the ability of the Company to repay its  obligations
as and when due or  failure to meet  certain  financial  covenants.  Financial
covenants include: minimum net worth requirements, total debt service coverage
ratio,  capital  expenditure   limitations,   and  prohibition  of  additional
indebtedness without prior authorization.


<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATION.



You should read the following  discussion regarding the Company along with the
Company's consolidated financial statements and related notes included in this
quarterly report. The following discussion contains forward-looking statements
that are subject to risks, uncertainties and assumptions. The Company's actual
results, performance and achievements in 2001 and beyond may differ materially
from those expressed in, or implied by these forward-looking  statements.  See
cautionary note regarding forward-looking statements.


Results of Operations


The financial  statements and related notes  contained  elsewhere in this Form
10-Q as of and for the six  months  ended June 30,  2001 and in the  Company's
Form 10-K for its fiscal year ended  December  31, 2000,  are  essential to an
understanding  of the comparisons  and are  incorporated by reference into the
discussion that follows.


Six months ended June 30, 2001 Compared to the six months ended June 30, 2000


The  Company's  operating  revenues  increased  from $20.6 million for the six
months ended June 30, 2000 to $33.0 million for the same period in 2001.  This
is an increase of 60.0%. This increase is attributable to the continued growth
at Carolina  National  Transportation  and Keystone  Lines,  the  expansion of
Keystone Logistics, Inc. and the start up of two new companies, CAM Transport,
Inc. and Unity Logistics, Inc.

The following table set forth the percentage relationships of expense items to
revenue for the six months ended June 30, 2001 and June 30, 2000:


<TABLE>
<CAPTION>
                                                      2001      2000
                                                     ------    ------

<S>                                                   <C>      <C>
Revenue                                               100.0%   100.0%
Operating expenses:
    Purchased transportation and commissions           88.0     86.7
    Insurance and claims                                2.6      3.1
    Salaries, wages and other                           3.2      4.1
    Other operating expenses                            4.1      3.5
                                                     -------   ------
     Total operating expenses                          97.9     97.4
                                                      ------   ------
Operating income                                        2.1      2.6
</TABLE>


<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATION (continued)


     The  Company  has  three  direct  variable  costs,  which  are  purchased
transportation,  commissions, and insurance. At June 30, 2000 the sum of these
direct  variable costs was 89.8% of revenue in comparison to 90.6% at June 30,
2001. As reflected in the table above, the overall cost of the direct variable
items  has  increased  .8%  while  insurance  and  claims  decreased  .5% as a
percentage of revenues.  This decrease in insurance and corresponding increase
in purchased  transportation and commissions is due to the Company brokering a
higher percentage of its freight in 2001 as compared to 2000. When the Company
brokers freight, the Company does not pay insurance on this freight.  However,
the purchased transportation expense is greater for brokered freight.

     Salaries,  wages and other expenses were 3.2% of revenue at June 30, 2001
and 4.1% for the same period in 2000. This is a decrease of 0.9% as related to
revenue. Salaries and wages do not increase at the same rate as revenue due to
economies  of  scale,  improved   productivity,   and  the  implementation  of
technological solutions. Other operating expenses were 4.1% of revenue at June
30, 2001 and 3.5% at June 30, 2000. The increase in other  operating  expenses
as a percentage of revenue is primarily  the result of the Company  increasing
the  allowance  for  doubtful  accounts.  The  addition to the  allowance  for
doubtful  accounts  during the six months ended June 30, 2001 was $162,297 and
$23,328 for the same period of 2000. The Company has two large customers whose
credit has  declined.  Management  believes the current  allowance  adequately
provides for the  possibility  that not all accounts  receivable for these two
larger customers will be collected.

     Based on the changes in revenue and expenses  discussed above,  operating
income  increased by $117,678  from $519,046 for the six months ended June 30,
2000 to $636,724 for the six months ended June 30, 2001.

     Interest expense increased by $46,325 in 2001.  Interest at June 30, 2000
was $326,631  and at June 30, 2001  interest was  $372,956.  This  increase in
interest  expense is  attributable  to the  additional  borrowing  against the
Company's lines of credit, partially offset by a reduction in interest rates.

     Non-operating  income,  exclusive  of interest  expense,  increased  from
$59,837 for the six months  ended June 30, 2000 to $139,446 for the six months
ended  June 30,  2001.  The  increase  was  primarily  attributable  to income
generated through the financing of receivables by T.C. Services.

     Net income for the six months ended June 30, 2001 was  $403,214  compared
with $252,252 for the same period in 2000.

<PAGE>

 Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATION (continued)



Three months ended June 30, 2001 Compared to the three months ended June 30,
2000



The Company's  operating  revenues  increased from $11.6 million for the three
months ended June 30, 2000 to $17.5 million for the same period in 2001.  This
is an increase of 51.3%. This increase is attributable to the continued growth
at Carolina  National  Transportation  and Keystone  Lines,  the  expansion of
Keystone Logistics, Inc. and the start up of two new Companies, CAM Transport,
Inc. and Unity Logistics, Inc.

The following table set forth the percentage relationships of expense items to
revenue for the three months ended June 30, 2001 and June 30, 2000:

<TABLE>
<CAPTION>
                                                      2001      2000
                                                     ------    ------

<S>                                                   <C>      <C>
Revenue                                               100.0%   100.0%
Operating expenses:
    Purchased transportation and commissions           88.4     86.8
    Insurance and claims                                2.6      2.7
    Salaries, wages and other                           3.0      4.0
    Other operating expenses                            4.3      4.0
                                                     -------   ------
     Total operating expenses                          98.3     97.5
                                                      ------   ------
Operating income                                        1.7      2.5
</TABLE>


     The  Company  has  three  direct  variable  costs,  which  are  purchased
transportation,  commissions,  and insurance.  For the three months ended June
30,  2000 the sum of these  direct  variable  costs  was 89.5% of  revenue  in
comparison  to 91.0% for the three months ended June 30, 2001. As reflected in
the table above,  the overall cost of the direct  variable items has increased
1.5% while  insurance  and claims  decreased  .1% as a percentage of revenues.
This   decrease  in  insurance   and   corresponding   increase  in  purchased
transportation  and  commissions  is due to the  Company  brokering  a  higher
percentage of its freight for the three months ended June 30, 2001 as compared
to the same period of time in 2000.  When the  Company  brokers  freight,  the
Company  does  not pay  insurance  on this  freight.  However,  the  purchased
transportation  expense is greater for brokered freight.  Partially offsetting
the decrease in insurance  expense  resulting from a higher amount of brokered
freight, is an increase in accident claims expense.




<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATION (continued)


     Salaries,  wages and other  expenses  were 3.0% of revenue  for the three
months  ended June 30,  2001 and 4.0% for the same  period in 2000.  This is a
decrease of 1.0% as related to revenue.  Salaries and wages do not increase at
the same rate as revenue due to economies of scale, improved productivity, and
the implementation of technological  solutions.  Other operating expenses were
4.3% of revenue  for the three  months  ended  June 30,  2001 and 4.0% for the
three months ended June 30, 2000. The increase in other operating  expenses as
a percentage of revenue is primarily the result of the Company  increasing the
allowance  for doubtful  accounts.  The addition to the allowance for doubtful
accounts  during the three  months ended June 30, 2001 was $63,138 and $12,498
for the same period of 2000. The Company has two large  customers whose credit
declined  in  2001.  Management  believes  the  current  allowance  adequately
provides for the  possibility  that not all accounts  receivable for these two
larger customers will be collected.

     Based on the changes in revenue and expenses  discussed above,  operating
income  increased by $22,391 from $281,993 for the three months ended June 30,
2000 to $304,384 for the three months ended June 30, 2001.

     Interest expense remained  relatively  constant with a slight increase of
$5,084 for the three  months  ended June 30,  2001 in  comparison  to the same
period of time in 2000.  Increased  borrowings  against the Company's  line of
credit were partially offset by a decrease in interest rates. Interest for the
three  months  ended June 30, 2000 was  $160,956  and  $166,040  for the three
months ended June 30, 2001.

     Non-operating  income,  exclusive  of interest  expense,  increased  from
$48,875  for the three  months  ended June 30,  2000 to $73,241  for the three
months ended June 30, 2001. The increase was primarily  attributable to income
generated through the financing of receivables by T.C. Services.

    Net income for the three months ended June 30, 2001 was $211,585 compared
with $169,912 for the same period in 2000.

Liquidity and Capital Resources


     As of June 30,  2001,  the  Company's  financial  position  continues  to
improve in  comparison  to the prior  fiscal  period.  The  Company  had a net
deficiency  in  shareholder  equity  of $2.1  million  at June  30,  2001,  an
improvement of $351,786 over year-end December 31, 2000.

     Net cash  provided  by (used  in)  operating  activities  increased  $1.0
million  from $(0.7)  million  for the six months  ended June 30, 2000 to $0.3
million  for the six  months  ended  June  30,  2001.  The  cash  provided  by
operations is due primarily to an increase in net income with a  corresponding
decrease in accounts receivable as a percentage of revenue growth.

     Net cash used in investing activities increased $938,857 from $16,307 for
the six months  ended June 30, 2000 to $955,164  for the six months ended June
30, 2001. Net cash used in investing activities during the first six months of
2001 related to the investment in additional equipment.

     Net cash  provided by  financing  activities,  primarily  generated  from
additional  borrowings,  decreased  $23,620  from  $689,054 for the six months
ended June 30, 2000 to $665,434 for the six months ended June 30, 2001.

<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATION (continued)


     In March 2001, the Company's  line of credit  agreement with Firstar Bank
was amended in order to increase the equipment line of credit from $500,000 to
$1,000,000.  The principal  balance on this equipment line is payable  monthly
based on a five-year  amortization of the outstanding  balance.  The equipment
line expires on May 15, 2002.  $740,695 was outstanding on this equipment loan
at June 30, 2001. In conjunction  with the March 2001 amendment of the Firstar
agreements,  the  personal  guarantees  of this  debt by the  Chief  Executive
Officer and Chief  Financial  Officer of the Company were reduced from a total
of $3 million to a total of $1 million.

     In addition to the $1,000,000  equipment line of credit, the Company also
has a $5.5  million  line of credit  with  Firstar  Bank.  $4.80  million  was
outstanding under this line at June 30, 2001.



Quantitative and Qualitative Disclosures About Market Risk

Inflation

     Changes in freight  rates  charged by the  Company to its  customers  are
generally  reflected in the cost of purchased  transportation  and commissions
paid by the  Company to  independent  contractors  and  agents,  respectively.
Therefore,  management believes that  future-operating  results of the Company
will be affected primarily by changes in volume of business.  However,  due to
the highly competitive  nature of the truckload motor carrier industry,  it is
possible that future  freight rates and cost of purchased  transportation  may
fluctuate, affecting the Company's profitability.


Certain Relationships and Related Transactions

     The Company leases office space for its  headquarters  in Gary,  Indiana,
for $3,000 monthly,  from Michael E. Kibler, the president and Chief Executive
Officer  and a director  of the  Company,  and Harold E.  Antonson,  the Chief
Financial Officer, treasurer and a director of the Company. Messrs. Kibler and
Antonson own the property as joint  tenants.  The Company's  monthly rent cost
increased from $2,200 to $3,000 in April 2001.

     One  of the  Company's  subsidiaries  provides  safety,  management,  and
accounting  services  to  companies  controlled  by the  President  and  Chief
Financial Officer of the Company.  These services are priced to cover the cost
of the employees providing the services.

     One  of  the  Company's  insurance  providers,   American  Inter-Fidelity
Exchange  (AIFE) is managed by a Director of the Company and the Company has a
deposit with the Provider.

     The  Company  has  long-term  notes  payable  due to its Chief  Executive
Officer, Chief Financial Officer, and August Investment Partnership, an entity
affiliated through common ownership, totaling approximately $4.3 million.



<PAGE>


                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)



PART II. OTHER INFORMATION


Item 6(b).  Reports on Form 8-K

     No Reports on Form 8-K have been filed during the quarter.



SIGNATURES

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


US 1 Industries, Inc.


Michael E. Kibler
President



Harold E. Antonson
Chief Financial Officer

August 10, 2001