Exhibit 13



              Consolidated Freightways Corporation
                        and Subsidiaries
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations


     Consolidated Freightways Corporation (the Company) completed
its  first  year  as  an  independent company  in  1997,  earning
operating  income  of  $45.3 million. This is  a  $118.4  million
improvement over the $73.1 million loss in 1996. 1997 includes  a
$14.3  million non-cash charge for the issuance of  common  stock
under the Company's restricted stock plan, which was not incurred
in  1996.   Excluding this charge, 1997 operating income improved
$132.7 million over the prior year.  The 1997 net income of $20.4
million or $0.92 per basic share compares to a net loss of  $55.6
million  or $2.52 per basic share in 1996.  Excluding the charge,
net  income  in 1997 was $28.9 million or $1.31 per basic  share.
These  significant  improvements were  attributable  to  improved
revenue yield coupled with aggressive cost containment programs.

     Revenues for 1997 increased 7.1% over the prior year to $2.3
billion,  with  net revenue per hundred weight  increasing  6.2%.
This  reflects the general rate increase implemented in  January,
1997,  combined with management's efforts to improve the  freight
mix.   The  Company also benefited by higher yields from  premium
service  offerings.   Overall,  the  less-than  truckload   (LTL)
industry benefited from higher rates in 1997, as tighter capacity
resulted   in  a  stable  pricing  environment.   Total   tonnage
increased 0.9%, while higher rated LTL tonnage increased 1.6%.

      Salaries, wages and benefits in 1997 increased   0.7%  over
the prior year. These expenses reflect Teamsters wage and benefit
increases  of  approximately $30 million, an  increase  of  $21.1
million  of incentive compensation for non-contractual  employees
and  expenses  associated with increased  business  levels.   The
Company also incurred a $14.3 million non-cash charge in 1997 for
the  issuance of approximately 1.1 million common shares  to  all
eligible,  full-time employees under its restricted  stock  plan.
These  additional expenses were offset by increased use  of  rail
services, a significant reduction in workers' compensation claims
cost  through aggressive cost containment, workplace  safety  and
return  to  work initiatives, and efficiencies in linehaul,  dock
and city operations. The 1996 expenses were adversely impacted by
the  implementation of the Business Accelerator System (BAS)  and
also  reflect a 3.5%, April 1, 1996, contractual wage and benefit
increase.   Also  included  in  1996  expenses  were  salary  and
benefits for administrative services which were outsourced to the
former  parent  in  1997 and a $15.0 million charge  to  increase
workers' compensation reserves.

      Operating expenses increased 5.4% in 1997 compared  to  the
prior  year due primarily to charges for administrative  services
outsourced  to  the former parent.  During 1997,   the  fees  for
these   services  were  $22.6  million.   In  1996,  the  expense
allocations  from  the former parent were included  in  salaries,
wages  and  benefits  as  noted in the previous  paragraph.   The
Company  also  experienced an increase in repair and  maintenance
expense  in  1997  due to its aging fleet.   This  was  partially
offset  by a 6.1% decrease in fuel costs due to lower fuel prices
per  gallon  and  a higher proportion of freight transported  via
rail, as  discussed below. In 1996, operating expenses  increased
0.7%  over 1995 due to expenses associated with implementing BAS.
Also  in  1996, the Company experienced a 20.9% increase in  fuel
prices.  The Company was able to recover approximately 80% of its
increased fuel costs through a fuel surcharge program.

      Purchased transportation increased 6.7% and 17.1%  in  1997
and 1996, respectively, as the Company increased its use of lower
cost  rail  services  in  strategic  lanes.   Rail  miles  as   a
percentage of total inter-city miles in 1997 increased  to  27.9%
from 26.0% in 1996 and 21.9% in 1995.

    Operating taxes and licenses decreased 2.9% and 3.4% in  1997
and  1996, respectively. These decreases are the result of  lower
fuel  taxes,  licensing fees and highway use taxes  as  a  higher
proportion  of  freight was transported via  rail,  as  discussed
above.    Additionally,  the Company has successfully  challenged
and reduced property tax assessments on its terminal properties.

      Claims  and insurance increased 11.4% in 1997 in line  with
increased  revenue levels. In 1996, claims and insurance  expense
decreased  4.5% over 1995 levels due to improved cargo  loss  and
damage experience.

     Depreciation expense decreased 17.5% from 1996 levels due to
a  higher  proportion of fully depreciated equipment in 1997  and
the  transfer of $57.6 million of excess properties to the former
parent concurrent with the spin-off. Depreciation increased  0.9%
in  1996  due to increased capital expenditures during  1995  and
1996.

      The  above  combination  of  increased  revenues  and  cost
containment  efforts resulted in an improvement in the  operating
ratio to 98.0% in 1997 from 103.4% in 1996.

      The 1995 and 1996 operating results were adversely affected
by  the implementation of BAS.  BAS, implemented in October 1995,
was  a  redesign of the freight system whereby freight  is  moved
directionally  from point-to-point, reducing miles and  handling,
thereby  lowering  costs  and average  transit  times.   Although
implementation of BAS ultimately improved on-time performance and
reduced  transit  times, system implementation took  longer  than
expected and utilization during the first half of 1996 was  below
expected levels.  Operational refinements in the second  half  of
the  year  and an increased acceptance of the Company's  improved
service  resulted  in total and LTL tonnage for  the  year  ended
December 31, 1996 increasing 1.0% and 2.5% over 1995 levels while
revenues  increased  1.9%.   The  excess  costs  related  to BAS,
combined  with  a depressed pricing environment, resulted  in  an
operating loss of $73.1 million in 1996.  The operating ratio  in
1996 was 103.4% compared with 102.0% in 1995.

     Other expense, net, decreased 30.4% in 1997 from 1996 levels
primarily  due  to investment income on the Company's  short-term
investments. In 1996, other expense, net increased over 1995  due
primarily  to interest expense on increased borrowings  from  the
former  parent  which is included in Miscellaneous,  net  in  the
Statements of Consolidated Operations.

      The Company's effective income tax (benefit) rates in 1997,
1996  and  1995  differ  from  the  statutory  Federal  rate  due
primarily to foreign taxes and non-deductible items.

      Management  is  in  the  initial  phases  of  replacing  or
converting  the Company's financial and operational  systems  and
applications  for  Year 2000 compliance.  Based  upon  a  current
assessment  of  systems and applications requiring  modification,
management expects to spend  $25 to $30 million over the next two
years.  Of this amount, approximately $11 million relates to  the
purchase  of new hardware and software, which will be capitalized
and  amortized  over  their estimated useful  lives.   Management
expects  to  have  all  of its financial and operational  systems
converted  by mid 1999.  However, to the extent systems  are  not
converted  by  the  year 2000, there could be a material  adverse
effect on the Company's operations.

     On February 9, 1998, Consolidated Freightways Corporation of
Delaware (CFCD), a wholly-owned subsidiary of the Company,  along
with  three  other national motor freight carriers, agreed  on  a
tentative  five-year National Master Freight Agreement  with  the
International  Brotherhood  of  Teamsters  (IBT).   The   current
agreement  expires on March 31, 1998.  The agreement, subject  to
ratification  by  members  of the IBT,  will  grant  among  other
things,  a  one-time, $750 signing bonus and increased  wage  and
pension  benefits for CFCD's union employees.  With  ratification
of  the  proposed agreement as well as a continued stable pricing
environment in 1998, management will continue to focus  on  yield
enhancement  and efficient use of existing capacity.   Management
will  also  continue  with its aggressive  workers'  compensation
claims  containment programs which proved successful in 1997  and
with refinements to improve operating efficiencies.  In an effort
to   offset   increased  operating  costs  in  1998,   management
implemented a 5.5% general rate increase in January,  which  will
apply  to  approximately 40% of customer revenues.   As discussed
in  Footnote  8  in  the  Company's 1997  Consolidated  Financial
Statements,  the  Company  has  a  restricted  stock  plan.    If
performance conditions are met, approximately 1.1 million  shares
of   common   stock  will  be  issued  in  December,  1998,   and
compensation expense recognized based on the then market price of
the  stock.   Based on the market price of the stock on  December
31,  1997,  the  Company would recognize a $9.0 million  non-cash
charge, net of related tax benefits.


Liquidity and Capital Resources

       As of December 31, 1997, the Company had $107.7 million in
cash and cash equivalents.  Net cash flow from operations for the
year  ended  December 31, 1997 was $77.4 million, primarily  from
net income and depreciation and amortization.  Management expects
cash  flows from operations in 1998 to be sufficient for  working
capital and capital expenditure needs.  Capital expenditures  for
the  year ended December 31,1997 were $22.7 million compared with
$48.2  million in 1996,  as management opted to minimize  capital
expenditures   during  its  first  year  of  operations   as   an
independent   company.    The  Company   expects   1998   capital
expenditures to be approximately $70 million, primarily  for  the
replacement  of aging trucks, tractors and trailers.   Management
expects  to  fund  these  capital  expenditures  with  cash  from
operations, supplemented by financing arrangements, if necessary.

      The  Company  has a $225.0 million secured credit  facility
with  several banks to provide for working capital and letter  of
credit  needs.  Working capital borrowings are limited to  $100.0
million  while  letters of credit are limited to $150.0  million.
Borrowings  under  the  agreement, which expires  in  2000,  bear
interest  based  upon  either  prime  or  LIBOR,  plus  a  margin
dependent on the Company's financial performance.  Borrowings and
letters of credit are secured by substantially all of the  assets
(excluding real property and certain rolling stock) of  CFCD, all
of  the  outstanding  stock of CFCD and 65%  of  the  outstanding
capital  stock  of Canadian Freightways Limited, a  wholly  owned
subsidiary of CFCD.  As of December 31, 1997, the Company had  no
short-term  borrowings and $93.1 million  of  letters  of  credit
outstanding  under this facility. The continued  availability  of
funds  under  this credit facility will require that the  Company
remain in compliance with certain financial covenants.  The  most
restrictive covenants require the Company to maintain  a  minimum
level  of  earnings  before  interest,  taxes,  depreciation  and
amortization,  minimum amounts of tangible net  worth  and  fixed
charge coverage, and limit capital expenditures.   The Company is
in  compliance  as  of December 31, 1997 and  expects  to  be  in
compliance with these covenants throughout 1998.

      As  of  December 31, 1997, the Company's ratio of long-term
debt to total capital was 6% compared with 7% as of December  31,
1996.  The current ratio was 1.3 to 1 and 1.1 to 1 as of December
31, 1997 and 1996, respectively.

Inflation

      Significant  increases in fuel prices, to  the  extent  not
offset  by  increases  in  transportation  rates,  would  have  a
material  adverse  effect on the profitability  of  the  Company.
Historically,   the Company has responded to periods  of  sharply
higher  fuel  prices by implementing fuel surcharge  programs  or
base  rate  increases,  or  both, to  recover  additional  costs.
However, there can be no assurance that the Company will be  able
to   successfully  implement  such  surcharges  or  increases  in
response to increased fuel costs in the future.

Other

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

      Certain  statements included or incorporated  by  reference
herein constitute "forward-looking statements" within the meaning
of  Section  27A of the Securities Act of 1933, as  amended,  and
Section  21E of the Securities Exchange Act of 1934, as  amended,
and are subject to a number of risks and uncertainties.  Any such
forward-looking statements included or incorporated by  reference
herein should not be relied upon as predictions of future events.
Certain such forward-looking statements can be identified by  the
use of forward-looking terminology such as "believes," "expects,"
"may,"  "will,"  "should,"  "seeks," "approximately,"  "intends,"
"plans,"  "pro  forma,"  "estimates,"  or  "anticipates"  or  the
negative  thereof  or  other  variations  thereof  or  comparable
terminology, or by discussions of strategy, plans or  intentions.
Such  forward-looking  statements are  necessarily  dependent  on
assumptions,  data or methods that may be incorrect or  imprecise
and they may be incapable of being realized.  In that regard, the
following  factors,  among others, and  in  addition  to  matters
discussed  elsewhere  herein  and in  documents  incorporated  by
reference herein, could cause actual results and other matters to
differ  materially from those in such forward-looking statements:
changes in general business and economic conditions; increases in
domestic  and  international competition  and  pricing  pressure;
increases  in  fuel prices; uncertainty regarding  the  Company's
ability   to  improve  results  of  operations;  labor   matters,
including  shortages  of drivers and increases  in  labor  costs;
changes   in  governmental  regulation;  environmental  and   tax
matters;  increases in costs associated with  the  conversion  of
financial and operational systems and applications for Year  2000
compliance  and failure to convert all systems by the year  2000.
As  a  result of the foregoing, no assurance can be given  as  to
future results of operations or financial condition.

<TABLE>

<CAPTION>

                           CONSOLIDATED FREIGHTWAYS CORPORATION
                                    AND SUBSIDIARIES
                          STATEMENTS OF CONSOLIDATED OPERATIONS
                                 Years Ended December 31,
                      (Dollars in thousands except per share data)



                                                    1997             1996              1995
<S>                                            <C>             <C>               <C>
REVENUES                                       $  2,299,075    $  2,146,172      $  2,106,529

COSTS AND EXPENSES
    Salaries, wages and benefits                  1,509,665       1,498,707         1,452,415
    Operating expenses                              363,615         345,006           342,762
    Purchased transportation                        191,041         179,126           152,953
    Operating taxes and licenses                     72,882          75,083            77,733
    Claims and insurance                             63,741          57,214            59,896
    Depreciation                                     52,872          64,102            63,556
                                                  2,253,816       2,219,238         2,149,315
OPERATING INCOME (LOSS)                              45,259         (73,066)          (42,786)

OTHER INCOME (EXPENSE)
  Investment income                                   1,894             263               756
  Interest expense                                   (3,213)           (843)             (918)
  Miscellaneous, net  (Note 10)                      (1,958)         (4,131)             (850)
                                                     (3,277)         (4,711)           (1,012)


Income (loss) before income taxes (benefits)         41,982         (77,777)          (43,798)
Income taxes (benefits) (Note 6)                     21,623         (22,201)          (13,889)

NET INCOME (LOSS)                              $     20,359    $    (55,576)     $    (29,909)

Basic average shares outstanding                 22,066,212      22,025,323        22,025,323
Diluted average shares outstanding               22,755,714      22,025,323        22,025,323

Basic Earnings (Loss) per Share: (Note 2)      $       0.92    $      (2.52)     $      (1.36)

Diluted Earnings (Loss) per Share: (Note 2)    $       0.89    $      (2.52)     $      (1.36)


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



                           CONSOLIDATED FREIGHTWAYS CORPORATION
                                     AND SUBSIDIARIES
                               CONSOLIDATED BALANCE SHEETS
                                       December 31,
                                 (Dollars in thousands)



                                                        1997             1996

ASSETS

Current Assets
  Cash and cash equivalents                         $  107,721      $   48,679
  Trade accounts receivable, net
       of allowances  (Note 2)                         310,601         285,410
  Other accounts receivable                             10,300           3,339
  Operating supplies, at lower of average cost
      or market                                          8,741          11,511
  Prepaid expenses                                      39,696          35,848
  Deferred income taxes  (Note 6)                       16,554          35,470
    Total Current Assets                               493,613         420,257


Property, Plant and Equipment, at cost
  Land                                                  78,227          78,989
  Buildings and improvements                           342,413         343,023
  Revenue equipment                                    559,610         559,823
  Other equipment and leasehold improvements           116,390         115,317
                                                     1,096,640       1,097,152
  Accumulated depreciation and amortization           (713,653)       (680,464)
                                                       382,987         416,688

Other Assets
  Deposits and other assets                              9,468          10,808
  Deferred income taxes  (Note 6)                       11,728           9,334
                                                        21,196          20,142

Total Assets                                        $  897,796      $  857,087


                The accompanying notes are an integral part of these statements.


                         CONSOLIDATED FREIGHTWAYS CORPORATION
                                   AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                     December 31,
                               (Dollars in thousands)


                                                       1997            1996

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
  Accounts payable                              $     83,127     $     87,511
  Accrued liabilities  (Note 3)                      212,644          187,267
  Accrued claims costs  (Note 2)                      82,023           95,780
  Federal and other income taxes  (Note 6)             7,706            4,083
    Total Current Liabilities                        385,500          374,641

Long-Term Liabilities
  Long-term debt   (Note 4)                           15,100           15,100
  Accrued claims costs  (Note 2)                     112,173          110,200
  Employee benefits (Note 7)                         115,220          113,312
  Other liabilities                                   26,356           33,136
    Total Liabilities                                654,349          646,389

Shareholders' Equity
Preferred stock, $.01 par value; authorized
   5,000,000 shares; issued none                           -                -
Common stock, $.01 par value; authorized
   50,000,000 shares; issued 23,038,437
   and 22,025,323 shares, respectively                   230              220
Additional paid-in capital                            71,461           57,174
Cumulative translation adjustment                     (6,572)          (4,910)
Retained earnings                                    178,573          158,214
Treasury stock, at cost  (18,151 shares)                (245)               -
  Total Shareholders' Equity                         243,447          210,698

Total Liabilities and Shareholders' Equity      $    897,796     $    857,087


           The accompanying notes are an integral part of these statements.


<TABLE>

<CAPTION>


                              CONSOLIDATED FREIGHTWAYS CORPORATION
                                        AND SUBSIDIARIES
                             STATEMENTS OF CONSOLIDATED CASH FLOWS
                                    Years Ended December 31,
                                     (Dollars in thousands)

                                                               1997         1996         1995
<S>                                                        <C>          <C>          <C>
Cash and Cash Equivalents, Beginning
  of Period                                                $  48,679    $  26,558    $  23,116

Cash Flows from Operating Activities
  Net income (loss)                                           20,359      (55,576)     (29,909)
  Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
    Depreciation and amortization                             54,679       64,565       63,902
    Increase (decrease) in deferred income taxes (Note 6)     16,522      (35,634)      18,556
    Gains from property disposals, net                          (914)      (3,089)      (2,360)
    Issuance of common stock under restricted
        stock plan (Note 8)                                   14,297            -            -
    Changes in assets and liabilities:
      Receivables                                            (32,152)     (34,484)      (4,851)
      Accounts payable                                        (4,384)       1,199        5,677
      Accrued liabilities                                     25,377        4,612       (1,883)
      Accrued claims costs                                   (11,784)      22,531        4,811
      Income taxes                                             3,623        2,715         (791)
      Employee benefits                                        1,908        7,216      (13,515)
      Other                                                  (10,161)      28,490        2,135
Net Cash Provided by Operating Activities                     77,370        2,545       41,772

Cash Flows from Investing Activities
  Capital expenditures                                       (22,674)     (48,203)    (111,962)
  Proceeds from sales of property                              4,591        8,329        6,529
Net Cash Used by Investing Activities                        (18,083)     (39,874)    (105,433)

Cash Flows from Financing Activities
  Former parent investment and advances, net (Note 10)             -       59,450       67,103
  Purchase of treasury stock                                    (245)           -            -
Net Cash Provided (Used) by Financing Activities                (245)      59,450       67,103

Increase in Cash and Cash Equivalents                         59,042       22,121        3,442

Cash and Cash Equivalents, End of Period                   $ 107,721    $  48,679    $  26,558

Supplemental Disclosure
Cash paid for income taxes (Note 2)                        $   1,478    $       -    $       -
Cash paid for interest (net of amounts capitalized)        $   1,444    $     877    $   1,485


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

</TABLE>



<TABLE>

<CAPTION>

                                              CONSOLIDATED FREIGHTWAYS CORPORATION
                                                         AND SUBSIDIARIES
                                          STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
                                                       (Dollars in thousands)



                                        Common Stock         Additional    Cumulative               Treasury
                                    Number of                 Paid-in     Translation   Retained     Stock,
                                     Shares       Amount      Capital      Adjustment   Earnings    at cost     Total

 <S>                                <C>             <C>       <C>          <C>         <C>          <C>     <C>
 Balance, December 31, 1994         22,025,323      $  220    $  57,174    $ (4,663)   $ 160,848    $   -   $  213,579

 Net cash infusion from
      former parent (Note 10)                -           -            -           -       67,103        -       67,103
 Net asset transfers from
      former parent                          -           -            -           -        9,283        -        9,283
 Net loss                                    -           -            -           -      (29,909)       -      (29,909)
 Translation adjustment                      -           -            -        (948)           -        -         (948)

 Balance, December 31, 1995         22,025,323         220       57,174      (5,611)     207,325        -      259,108

Net cash infusion from
     former parent (Note 10)                 -           -            -           -       59,450        -       59,450
 Net asset transfers to
     former parent (Note 10)                 -           -            -           -      (52,985)       -      (52,985)
 Net loss                                    -           -            -           -      (55,576)       -      (55,576)
 Translation adjustment                      -           -            -         701            -        -          701

Balance, December 31, 1996          22,025,323         220       57,174      (4,910)     158,214        -      210,698

Issuance of common stock under
   restricted stock plan (Note 8)    1,013,114          10       14,287           -            -        -       14,297
 Purchase of 18,151 treasury shares          -           -            -           -            -     (245)        (245)
 Net income                                  -           -            -           -       20,359        -       20,359
 Translation adjustment                      -           -            -      (1,662)           -        -       (1,662)

Balance, December 31, 1997          23,038,437      $  230    $  71,461    $ (6,572)   $ 178,573    $(245)  $  243,447


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







                   CONSOLIDATED FREIGHTWAYS CORPORATION
                             AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. Organization

      Consolidated  Financial Statements and Basis of  Presentation:    The
accompanying  consolidated financial statements  include  the  accounts  of
Consolidated Freightways Corporation and its wholly-owned subsidiaries (the
Company).  The Company, incorporated in the state of Delaware, consists  of
Consolidated Freightways Corporation of Delaware (CFCD), a nationwide motor
carrier, and its Canadian operations, including Canadian Freightways,  Ltd.
(CFL),  Epic  Express,  Milne & Craighead, Canadian Sufferance  Warehouses,
Blackfoot Logistics, and other related businesses; Redwood Systems, a third
party  logistics provider; and the Leland James Service Corporation (LJSC),
an   administrative  service  provider.  The  Company  provides  less-than-
truckload transportation and logistics services nationwide and in parts  of
Canada,  Mexico, the Caribbean area, Latin and Central America, Europe  and
Pacific  Rim  countries.   Approximately 95% of the Company's revenues  are
domestic.

      The Company was a wholly-owned subsidiary of CNF Transportation Inc.,
(the former parent), through December 1, 1996.    On December 2, 1996,  the
Company  was  spun-off  in a tax free distribution  (the  Distribution)  to
shareholders.   The  amounts  included  in  the  accompanying  consolidated
financial  statements  through December 1, 1996 are based  upon  historical
amounts  included in the consolidated financial statements  of  the  former
parent  and  are presented as if the Company had operated as an independent
stand-alone  entity, except that it has not been allocated any  portion  of
the former parent's consolidated borrowings or interest expense thereon.


2.  Principal Accounting Policies

       Recognition  of  Revenues:   Transportation  freight   charges   are
recognized as revenue when freight is received for shipment.  The estimated
costs  of  performing the total transportation services are  then  accrued.
This  revenue  recognition method does not result in a material  difference
from in-transit or completed service methods of recognition.

      Cash  and  Cash  Equivalents:  The Company  considers  highly  liquid
investments with an original maturity of three months or less  to  be  cash
equivalents.

      Trade Accounts Receivable, Net:  Trade accounts receivable are net of
allowances of $7,467,000 and $9,692,000 as of December 31, 1997  and  1996,
respectively.

      Property,  Plant  and Equipment:  Property, plant and  equipment  are
depreciated  on  a straight-line basis over their estimated  useful  lives,
which  are generally 25 years for buildings and improvements, 6 to 10 years
for  tractor  and  trailer  equipment and 3 to  10  years  for  most  other
equipment.   Leasehold improvements are amortized over the shorter  of  the
terms of the respective leases or the useful lives of the assets.

      Expenditures  for equipment maintenance and repairs  are  charged  to
operating  expenses  as  incurred; betterments are capitalized.   Gains  or
losses on sales of equipment are recorded in operating expenses.

     Income Taxes:   The Company follows the liability method of accounting
for  income taxes.  Prior to the Distribution, the Company was included  in
the  consolidated federal income tax return and consolidated unitary  state
income  tax returns of the former parent.  Income tax benefits and deferred
income taxes presented in periods prior to the Distribution represent a pro-
rata  share  of  the former parent's consolidated income  tax  expense  and
deferred  income taxes and approximate those that would have been  recorded
had the Company filed separate income tax returns.

     Accrued Claims Costs:  The Company provides for the uninsured costs of
medical,  casualty,  liability, vehicular, cargo and workers'  compensation
claims.  Such costs are estimated each year based on historical claims  and
unfiled  claims relating to operations conducted through December 31.   The
actual costs may vary from estimates based upon trends of losses for  filed
claims  and  claims  estimated to be incurred.  The  long-term  portion  of
accrued  claims  costs  relates primarily to workers'  compensation  claims
which are payable over several years.

     Interest Expense:  The interest expense presented in the Statements of
Consolidated  Operations  is  related  to  industrial  revenue  bonds,   as
discussed in Note 4, and long-term tax liabilities. The interest expense as
presented for the years ended December 31, 1996 and 1995 is not necessarily
intended  to  reflect  the expense that would have been  incurred  had  the
Company been an independent stand-alone company prior to the Distribution.

     Earnings per Share:    The Company adopted the provisions of Statement
of  Financial Accounting Standards (SFAS) No. 128, "Earnings per Share," in
1997.    Basic  earnings per share is calculated using  only  the  weighted
average  shares  outstanding for the period.   Diluted earnings  per  share
includes  the  dilutive  effect  of the Company's  restricted  stock.   See
Footnote  8,  "Stock  Compensation Plans."   The  dilutive  effect  of  the
restricted  stock for the year ended December 31, 1997 was 689,502  shares.
Basic and diluted earnings per share for the years ended December 31,  1996
and 1995 were computed using 22,025,323 shares, which represents the number
of shares issued in the Distribution, and remain as previously reported.

      Estimates:  Management makes estimates and assumptions when preparing
the  financial statements in conformity with generally accepted  accounting
principles.  These estimates and assumptions affect the amounts reported in
the  accompanying financial statements and notes thereto.   Actual  results
could differ from those estimates.

       Recent  Accounting  Pronouncements:  In  June  1997,  the  Financial
Accounting   Standards  Board  (FASB)  issued  SFAS  No.  130,   "Reporting
Comprehensive  Income."   This  statement  requires  that  all   items   of
comprehensive income be prominently displayed in the financial  statements.
Reclassification  of  prior year financial statements  is  required.   This
statement is effective for fiscal years beginning after December 15,  1997.
Adoption of this statement will not affect previously reported earnings.

      Also  in June 1997, the FASB issued SFAS No. 131, "Disclosures  about
Segments  of  an  Enterprise  and  Related  Information."   This  statement
requires  the presentation of financial information on the same basis  that
it  is  used  within  an organization to evaluate segment  performance  and
allocate   resources.    It  also  requires  enhanced   disclosures   about
geographic,  product and service information.  This statement is  effective
for  fiscal  years  beginning after December 15, 1997.  Management  expects
that  adoption  of this statement will not have a material  effect  on  the
Company's reporting requirements.

       Reclassification:   Certain  amounts  in  prior   years'   financial
statements   have  been  reclassified  to  conform  to  the  current   year
presentation.


3. Accrued Liabilities

     Accrued liabilities consisted of the following as of December 31:

                                              1997         1996
    (Dollars in thousands)

     Accrued holiday and vacation pay     $  75,002    $  70,728
     Other accrued liabilities               59,378       46,219
     Wages and salaries                      26,663       27,287
     Accrued union health and welfare        22,281       21,296
     Accrued taxes other than income taxes   19,854       18,040
     Accrued incentive bonus                  9,466        3,697
     Total accrued liabilities            $ 212,644    $ 187,267


4. Long-Term Debt

      As  of  December  31,  1997  and 1996, long-term  debt  consisted  of
$15,100,000 of industrial revenue bonds with rates between 7.0% and  7.25%,
due at various dates in 2003 and 2004.

      The Company has a $225.0 million secured credit facility with several
banks  to provide for working capital and letter of credit needs.   Working
capital  borrowings are limited to $100.0 million while letters  of  credit
are  limited  to  $150.0  million. Borrowings under  the  agreement,  which
expires  in  2000, bear interest based upon either prime or LIBOR,  plus  a
margin  dependent on the Company's financial performance.   Borrowings  and
letters of credit are secured by substantially all of the assets (excluding
real  property  and certain rolling stock) of CFCD, all of the  outstanding
stock  of  CFCD  and 65% of the outstanding capital stock of  CFL.   As  of
December  31,  1997,  the Company had no short-term  borrowings  and  $93.1
million of letters of credit outstanding under this facility. The continued
availability  of  funds under this credit facility will  require  that  the
Company  remain in compliance with certain financial covenants.   The  most
restrictive  covenants require the Company to maintain a minimum  level  of
earnings  before  interest, taxes, depreciation and  amortization,  minimum
amounts  of tangible net worth and fixed charge coverage, and limit capital
expenditures.   The Company is in compliance as of December 31,  1997,  and
expects to be in compliance with these covenants throughout 1998.

      The  Company's  interest expense, as presented on the  Statements  of
Consolidated Operations, is net of capitalized interest of $0, $339,000 and
$361,000   for  the  years  ended  December  31,  1997,  1996   and   1995,
respectively.

      Based  on interest rates currently available to the Company for  debt
with  similar  terms  and  maturities, the fair  value  of  long-term  debt
exceeded  book value as of December 31, 1997 and 1996 by 10.6%  and  11.6%,
respectively.

      There are no aggregate annual maturities or sinking fund requirements
of long-term debt for each of the next five years ending December 31, 2002.


5. Leases

      The  Company  is obligated under various non-cancelable leases  which
expire at various dates through 2013.

      Future  minimum  lease  payments under all  leases  with  initial  or
remaining  non-cancelable lease terms in excess of one year as of  December
31, 1997, are $21,680,000 in 1998, $18,608,000 in 1999, $3,058,000 in 2000,
$1,156,000 in 2001, $478,000 in 2002, and $604,000 thereafter.

     Rental expense for operating leases is comprised of the following:

                                      1997      1996       1995
      (Dollars in thousands)

       Minimum rentals              $37,091   $47,146     $56,118
       Less  sublease rentals          (635)   (1,029)     (5,768)
       Net rental expense           $36,456   $46,117     $50,350


6. Income Taxes

     The components of pretax income (loss) and income taxes (benefits) are
as follows:

                                      1997     1996       1995
     (Dollars in thousands)

     Pretax income (loss)
       U.S. corporations           $ 31,296  $(86,829)  $(53,674)
       Foreign corporations          10,686     9,052      9,876
       Total pretax income (loss)  $ 41,982  $(77,777)  $(43,798)

     Income taxes (benefits)
       Current
         U.S. Federal              $   (296) $ 11,014   $(32,078)
         State and local                 88    (2,048)    (4,630)
         Foreign                      5,309     4,467      4,263
                                      5,101    13,433    (32,445)

      Deferred
         U.S. Federal                14,526   (35,098)    16,183
         State and local              1,884      (536)     1,861
         Foreign                        112         -        512
                                     16,522   (35,634)    18,556
   Total income taxes (benefits)   $ 21,623  $(22,201)  $(13,889)


     Deferred tax assets and liabilities in the Consolidated Balance Sheets
are  classified  based  on  the related asset  or  liability  creating  the
deferred  tax.  Deferred taxes not related to a specific asset or liability
are  classified  based  on  the  estimated period  of  reversal.   Although
realization  is  not assured, management believes it more likely  than  not
that all deferred tax assets will be realized.

      The  components  of  deferred  tax  assets  and  liabilities  in  the
Consolidated Balance Sheets as of December 31 relate to the following:

                                                     1997      1996
     (Dollars in thousands)

     Deferred taxes - current
     Assets
       Reserves for accrued claims costs        $  23,079  $  29,434
       Other reserves not currently deductible      2,821     16,573

     Liabilities
       Unearned revenue, net                       (9,346)   (10,537)
     Total deferred taxes - current                16,554     35,470

     Deferred taxes - non current
     Assets
       Reserves for accrued claims costs           43,675     42,477
       Employee benefits                           22,934     20,452
       Retiree health benefits                     24,054     23,539
       Federal net operating loss and
              credit carryovers                     1,743      5,418

     Liabilities
       Depreciation                               (63,937)   (63,939)
       Tax benefits from leasing transactions     (13,875)   (15,166)
       Other                                       (2,866)    (3,447)
     Total deferred taxes - non current            11,728      9,334

           Net deferred taxes                   $  28,282  $  44,804


     For income tax reporting purposes, the Company had alternative minimum
tax  credit  carryovers  of  $1.6 million as of  December  31,  1997.   The
carryovers have no expiration date.

     Income taxes (benefits) varied from the amounts calculated by applying
the U.S. statutory income tax rate to the pretax income (loss) as set forth
in the following reconciliation:

                                              1997      1996      1995

     U.S. statutory tax rate                  35.0%    (35.0)%   (35.0)%
     State income taxes (benefits), net of
       federal income tax benefit              4.7      (2.0)     (3.0)
     Foreign taxes in excess of
       U.S. statutory rate                     4.0       1.7       3.0
     Non-deductible operating
       expenses                                3.8       2.6       4.1
     Fuel tax credits                         (0.6)     (0.4)     (1.1)
     Foreign tax credits                      (0.2)      0.7        --
     Other, net                                4.8       3.9       0.3
       Effective income tax rate              51.5%    (28.5)%   (31.7)%


      The  cumulative  undistributed  earnings  of  the  Company's  foreign
subsidiaries (approximately $67 million as of December 31, 1997), which  if
remitted  are subject to withholding tax, have been reinvested indefinitely
in  the  respective  foreign  subsidiaries' operations  unless  it  becomes
advantageous  for tax or foreign exchange reasons to remit these  earnings.
Therefore, no withholding or U.S. taxes have been provided.  The amount  of
withholding  tax  that would be payable on remittance of the  undistributed
earnings would be $3.3 million.


7.   Employee Benefit Plans

      The Company maintains a non-contributory defined benefit pension plan
(the Pension Plan) covering the Company's non-contractual employees in  the
United  States.   The Company's annual pension provision and  contributions
are  based  on an independent actuarial computation. The Company's  funding
policy  is  to  contribute the minimum required tax-deductible contribution
for  the  year. However, it may increase its contribution above the minimum
if  appropriate to its tax and cash position and the Pension Plan's  funded
status.   Benefits  under the Pension Plan are based on  a  career  average
final  five-year pay formula. Approximately 89% of  the Pension Plan assets
are  invested  in  publicly  traded stocks and  bonds.   The  remainder  is
invested in temporary cash investments and real estate funds.

     The following information sets forth the Company's pension liabilities
included  in  Employee Benefits in the Consolidated Balance  Sheets  as  of
December 31:

                                                         1997           1996
     (Dollars in thousands)

     Accumulated benefit obligation, including
       vested benefits of $204,997 in 1997 and
       $183,600 in 1996                               $(214,289)     $(191,225)

     Effect of projected future compensation
         levels                                         (29,580)       (22,767)

     Projected benefit obligation                      (243,869)      (213,992)

     Pension Plan assets at market  value               244,286        213,787

     Pension Plan assets greater (less) than
      projected benefit obligation                          417           (205)
     Unrecognized prior service costs                     8,056          9,841
     Unrecognized net gain                              (49,484)       (49,123)
     Unrecognized net asset at transition, being
        amortized over 18 years                          (6,621)        (7,725)
     Pension Plan liability                           $ (47,632)     $ (47,212)

     Weighted average discount rate                         7.5%           8.0%
     Expected long-term rate of return
      on assets                                             9.5%           9.5%
     Rate of increase in future
      compensation levels                                   5.0%           5.0%

     Net pension cost includes the following:
                                                  1997        1996       1995
     (Dollars in thousands)

     Cost of benefits earned during
      the year                                 $  5,975    $ 7,055    $ 5,610
     Interest cost on projected
      benefit obligation                         17,172     16,596     15,130
     Actual gain arising from
      plan assets                               (36,697)   (32,163)   (34,490)
     Net amortization and deferral               13,970     13,628     20,330
     Net pension cost                          $    420    $ 5,116    $ 6,580

      The  Company's Pension Plan includes a program to provide  additional
benefits for compensation excluded from the basic Pension Plan.  The annual
provision  for  this plan is based upon independent actuarial  computations
using  assumptions consistent with the Pension Plan.  As  of  December  31,
1997,  the liability associated with this plan was $1,177,000.  The pension
cost was $175,000 for the year ended December 31, 1997.

      Approximately 85% of the Company's domestic employees are covered  by
union-sponsored, collectively bargained, multi-employer pension plans.  The
Company   contributed  and  charged  to  expense  $126,606,000   in   1997,
$116,712,000  in  1996,  and $104,042,000 in 1995  for  such  plans.  Those
contributions  were made in accordance with negotiated labor contracts  and
generally were based on time worked.

     The Company maintains a retiree health plan which provides benefits to
non-contractual employees at least 55 years of age with 10 years or more of
service.  The retiree health plan limits benefits for participants who were
not  eligible to retire before January 1, 1993, to a defined dollar  amount
based  on age and years of service and does not provide employer-subsidized
retiree  health  care benefits for employees hired on or after  January  1,
1993.

      The  following  information  sets  forth  the  Company's  total  post
retirement  benefit  liabilities  included  in  Employee  Benefits  in  the
Consolidated Balance Sheets as of  December 31:

                                                       1997        1996
     (Dollars in thousands)

   Accumulated post retirement benefit obligation
     Retirees and other inactives                    $33,601      $31,895
     Participants  currently eligible  to  retire      6,796        6,451
     Other active participants                         6,379        6,055
                                                      46,776       44,401
     Unrecognized prior service cost                     352          395
     Unrecognized valuation gain                      17,853       20,207
      Accrued  post  retirement benefit  liability   $64,981      $65,003

     Weighted average discount rate                     7.5%         8.0%
     Average health care cost trend rate
        First year                                      6.5%         9.0%
        Declining to (year 1999)                        5.5%         6.0%


      Net  periodic  post  retirement benefit costs include  the  following
components:

                                               1997     1996      1995
     (Dollars in thousands)

     Cost of benefits earned during
      the year                              $   409   $   540    $   432
     Interest cost on accumulated post
      retirement obligation                   3,472     4,000      3,768
     Net   amortization  and  deferral       (1,023)     (103)      (526)
     Net periodic post retirement
      benefit cost                          $ 2,858   $ 4,437    $ 3,674

      A  one  percent  annual increase in the health care cost  trend  rate
assumption  would  have increased the accumulated post  retirement  benefit
obligation  by  $1,977,000 as of December 31, 1997. The net  periodic  post
retirement benefit cost would have increased by $148,000 for the year ended
December 31, 1997.

      The  Company's  non-contractual employees in the  United  States  are
eligible to participate in the Company's Stock and Savings Plan.  This is a
401(k)  plan which allows employees to make contributions that the  Company
matches  with  common  stock up to 50% of the  first  three  percent  of  a
participant's  basic compensation.   The Company's contribution,  which  is
charged  as  an  expense, vests immediately with the employee  and  totaled
$1,993,000 in 1997, $1,926,000 in 1996, and $1,990,000 in 1995.

      The Company has adopted various plans relating to the achievement  of
specific  goals  to  provide  incentive bonuses for  designated  employees.
Total  incentive  bonuses  earned  by the  participants  were  $25,690,000,
$4,614,000 and $1,288,000 for the years ended December 31, 1997,  1996  and
1995, respectively.


8.   Stock  Compensation Plans

      The  Company has a Stock Option and Incentive Plan (the  Plan)  under
which  shares  of  restricted stock were granted to its regular,  full-time
employees.   During  December 1996,  2,146,450 shares  were  granted  at  a
weighted  average  price of $7.475 per share.  During 1997,  an  additional
1,057,027  shares were granted at a weighted average price  of  $15.31  per
share.   The  shares vest over three years from the date  of  the  original
grant  and  are  contingent upon the Company's stock price  achieving  pre-
determined  increases over the grant price for 10 consecutive trading  days
following  each year.  All restricted stock awards entitle the  participant
credit for any dividends. Compensation expense is recognized based upon the
current market price and the extent to which performance criteria are being
met.   On December 16, 1997, restrictions on approximately one-third of the
shares  lapsed.  Accordingly, the Company recognized a non-cash  charge  of
$14,297,000.   The  Company has 2,144,122 granted but  unissued  shares  of
restricted  stock  for which compensation expense will be  recognized  over
future  vesting  periods  as appropriate. As of December  31,  1997,  those
shares  had  an  aggregate market value of $29,212,000.   The  Company  has
100,321 shares remaining reserved under the Plan.

      The Plan also allows for officers, non-employee directors and certain
designated employees to be granted options to purchase common stock of  the
Company.   The terms of the options will be set at the date of  grant.   No
options have been granted as of December 31, 1997.

      In  1995,  the FASB issued SFAS No. 123, "Accounting for  Stock-Based
Compensation." Adoption of this statement is optional, and the Company  has
opted  to account for stock-based compensation in accordance with  APB  25,
"Accounting for Stock Issued to Employees."   Had the Company adopted  this
statement, pro forma net income for the year ended December 31, 1997  would
have  been  $16.6  million or $0.75 per basic share and $0.73  per  diluted
share.  This statement would have had an immaterial effect on the net  loss
for  the  year ended December 31, 1996.   The net loss for the  year  ended
December 31, 1995 would remain as reported.


9.  Contingencies

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

     On February 12, 1998, the United States District Court for the Central
District of California dismissed two lawsuits filed against the Company and
its  principal  operating subsidiary.   The court  accepted  the  Company's
argument that the claims and issues in question are matters covered by  the
collective  bargaining  agreement  and  subject  to  the  arbitration   and
grievance  procedures.   The underlying lawsuits, filed  in  October  1997,
claimed among other things, invasion of privacy by the use of video cameras
at  a  terminal facility, including restrooms, in order to combat a problem
with theft and drug use.   Approximately five plaintiffs were non-employees
and  were not covered by the collective bargaining agreement, and therefore
may  pursue  legal action in Riverside County Superior Court.   It  is  the
opinion  of  management that the ultimate outcome of the  remaining  claims
will not have a material adverse effect on the Company's financial position
or results of operations.

     Consolidated tax returns in which the Company was included in prior to
the spin-off from its former parent have been and are being examined by the
Internal Revenue Service (IRS). The tax sharing agreement entered into with
the  former  parent  obligates  the Company to  pay  additional  taxes  and
interest should certain issues identified by the IRS not be resolved in the
Company's  favor.  While favorable resolution is not assured,  the  Company
believes that the ultimate outcome will not have a material adverse  effect
on its financial position or results of operations.

      CFCD and the International Brotherhood of Teamsters (IBT) are parties
to the National Master Freight Agreement  (NMFA) which expires on March 31,
1998.    On  February 9, 1998, CFCD, along with three other national  motor
freight  carriers,  agreed on a tentative, five-year  NMFA  with  the  IBT,
subject to ratification by its members.

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


10.  Related Party Transactions

      The  Company  is  party to a Transition Services Agreement  with  its
former  parent under which the former parent provides information  systems,
data   processing,   computer  and  communications,   payroll   and   other
administrative services. Services are paid for by the Company based upon an
arm's  length  negotiated basis.  The agreement  is  for  three  years  but
contains  provisions  that  are cancelable by the  Company  on  six  months
written notice.   The former parent can cancel any and all services, except
telecommunications and data processing, on six months notice.  For the year
ended  December 31, 1997, the Company was charged $22,649,000 for  services
under the agreement.  For the period from the Distribution date to December
31, 1996, the Company was charged $2,600,000. The Company is also party  to
an  agreement  with its former parent which provides for the allocation  of
taxes   and  certain  liabilities  arising  from  periods  prior   to   the
Distribution.

      Prior  to  the Distribution, the former parent administered uninsured
workers'  compensation  and employer's liability claims  made  against  the
Company  and,  where  required by law or contract, provided  the  necessary
guarantees  or collateral for the performance of the Company's  obligations
in  each  state.  As a condition of the Distribution, those guarantees  and
collateral will remain in place until the pending claims are resolved.   To
indemnify the former parent against liability relating to these claims, the
Company has pledged real properties and letters of credit in the amounts of
$50.0  million  and  $30.0 million, respectively, for the  benefit  of  the
former parent.   The potential liabilities, and related pledged collateral,
should be reduced over time as the Company's pending claims are resolved.

      Prior  to  the Distribution, the Company participated in  the  former
parent's   centralized  cash  management  system  and,  consequently,   its
operating  and capital expenditure needs were met by the former  parent  to
the  extent  that  cash  from operating activities was  insufficient.   The
related interest expense on these advances, included in Miscellaneous,  net
in  the Statements of Consolidated Operations, was approximately $6,115,000
and   $1,729,000  for  the  years  ended  December  31,  1996   and   1995,
respectively.   Additionally,   the  Company  received  certain   corporate
support services from the former parent, namely accounting, finance,  legal
and  treasury  services.  Costs were allocated to the  Company  using  both
incremental and proportional methods on a revenue and capital basis.    For
the  years  ended December 31, 1996 and 1995, the charges were  $10,600,000
and  $11,946,000,  respectively.  These costs  are  included  in  Operating
Expenses  in  the  Statements of Consolidated  Operations.     The  Company
believes  that  the  allocation methods used provided the  Company  with  a
reasonable share of such expenses and approximate amounts which would  have
been  incurred  had  the  Company operated on an  independent,  stand-alone
basis.

     LJSC provided various administrative services to the former parent and
its  subsidiaries  under  service  contracts  at  an  aggregate  charge  of
$64,228,000  for the period January 1, 1996 through the Distribution  date.
The   aggregate  charges  for  the  year  ended  December  31,  1995   were
$84,471,000.   At  the  time  of the Distribution,  certain  administrative
service departments of LJSC that provided services to the former parent and
its subsidiaries were transferred to a subsidiary of the former parent.  In
connection  with the transfer of these departments, certain net assets  and
liabilities  in  the amounts of $11,163,000 and $13,795,000,  respectively,
were transferred from LJSC to the former parent.

      In connection with the Distribution, certain real properties of CFCD,
with  an aggregate net book value of $57,574,000, were transferred  to  the
former  parent.   Additionally, $1,957,000 of  net  liabilities  were  also
transferred from CFCD to the former parent.

<TABLE>

<CAPTION>
                                            CONSOLIDATED FREIGHTWAYS CORPORATION
                                                     AND SUBSIDIARIES
                                                 Quarterly Financial Data
                                                       (Unaudited)
                                       (Dollars in thousands except per share data)


                                             March 31            June 30        September 30         December 31
<S>                                    <C>              <C>                 <C>                 <C>
1997 - Quarter Ended

     Revenues                                $545,633          $578,623            $603,253           $571,566
     Operating income (loss)                    8,537            16,676              24,340             (4,294)(a)
     Income (loss) before
         income taxes (benefits)                7,999            15,331              23,383             (4,731)
     Income taxes (benefits)                    4,745             8,413              11,600             (3,135)
     Net income (loss)                          3,254             6,918              11,783             (1,596)
     Basic earnings (loss) per share             0.15              0.31                0.53              (0.07)
     Diluted earnings (loss) per share           0.15              0.31                0.51              (0.07)
     Market price range                  $7.00-$12.25    $10.00-$16.813       $13.75-$18.50     $11.875-$18.438


                                             March 31            June 30          September 30        December 31

1996 - Quarter Ended

     Revenues                                $502,544          $529,997            $559,605            $554,026
     Operating loss                           (24,557)          (13,667)             (2,301)            (32,541)(b)
     Loss before income tax benefits          (26,342)          (14,498)             (2,683)            (34,254)
     Income tax benefits                       (6,206)           (6,566)               (928)             (8,501)
     Net loss                                 (20,136)           (7,932)             (1,755)            (25,753)
     Basic loss per share                       (0.91)            (0.36)              (0.08)              (1.17)
     Diluted loss per share                     (0.91)            (0.36)              (0.08)              (1.17)
     Market price range                           N/A               N/A                 N/A        $6.00-$9.125

<F/N>
(a)  Includes $14.3 million non-cash charge for the issuance of common stock under the Company's
        restricted stock plan.
(b)  Includes $15.0 million non-cash charge for the increase in workers' compensation reserve.
</TABLE>

<TABLE>

<CAPTION>

                                                         Five Year Financial Summary
                                                   Consolidated Freightways Corporation
                                                             And Subsidiaries
                                                          Years Ended December 31
                                              (Dollars in thousands except per share data)
                                                              (Unaudited)

                                                  1997               1996              1995          1994        1993
SUMMARY OF OPERATIONS
<S>                                          <C>               <C>                <C>            <C>         <C>
Revenues                                     $    2,299,075    $   2,146,172      $2,106,529     $1,936,412  $2,074,323
Operating income (loss)                              45,259(a)       (73,066)(b)     (42,786)(c)    (47,743)     29,403
Depreciation and amortization                        54,679           64,565          63,902         73,443      83,739
Investment income                                     1,894              263             756            497         459
Interest expense                                      3,213              843             918            880         443
Income (loss) before income taxes (benefits)         41,982          (77,777)        (43,798)       (44,478)     36,769
Income taxes (benefits)                              21,623          (22,201)        (13,889)       (14,274)     16,628
Net income (loss)                                    20,359          (55,576)        (29,909)       (32,116)     20,141
Cash from operations                                 77,370            2,545          41,772         33,739      67,186

PER SHARE
Basic earnings (loss)                                  0.92            (2.52)          (1.36)         (1.46)       0.91
Diluted earnings (loss)                                0.89            (2.52)          (1.36)         (1.46)       0.91
Shareholders' equity                                  10.58             9.57           11.76           9.70       12.13

FINANCIAL POSITION
Cash and cash equivalents                           107,721           48,679          26,558         23,116      10,764
Property, plant and equipment, net                  382,987          416,688         501,311        452,878     500,866
Total assets                                        897,796          857,087         866,698        852,510     878,934
Capital expenditures                                 22,674           48,203         111,962         32,120      49,395
Long-term debt                                       15,100           15,100          15,100         15,100      15,100
Shareholders' equity                                243,447          210,698         259,108        213,579     267,074

RATIOS AND STATISTICS
Current ratio                                      1.3 to 1         1.1 to 1        1.0 to 1       1.1 to 1    1.0 to 1
Net income (loss) as % of revenues                     0.9%           (2.6)%          (1.4)%         (1.7)%        1.0%
Effective income tax rate                             51.5%          (28.5)%         (31.7)%        (32.1)%       45.2%
Long-term debt as % of
    total capitalization                                 6%               7%              6%             7%          5%
Return on average invested capital                       8%            (22)%           (11)%          (11)%          6%
Return on average shareholders' equity                   9%            (24)%           (13)%          (13)%          8%
Average shares outstanding                       22,066,212       22,025,323      22,025,323     22,025,323  22,025,323
Market price range                             $7.00-$18.50     $6.00-$9.125             n/a            n/a         n/a
Number of shareholders                               31,650           13,500             n/a            n/a         n/a
Number of employees                                  21,600           20,300          20,200         22,000      22,100

<F/N>
(a)  Includes $14.3 million non-cash charge for the issuance of common stock under the Company's restricted stock plan.
(b)  Includes $15.0 million non-cash charge for the increase in workers' compensation reserve.
(c)  Includes approximately $26 million of costs related to implementation of the Business Accelerator System.
</TABLE>