Exhibit 13

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


Comparison of 2000 and 1999

Revenues  for  the  year ended December 31,  2000  decreased  1.1%
compared  to  1999  due  to an 8.1% decrease  in  tonnage  levels.
Continued  refinement of the Company's freight profile,  a  higher
proportion of lighter weight freight in the system as  well  as  a
slow  down in the economy in the fourth quarter accounted for  the
decrease  in  tonnage. Shipments decreased 4.1%  and  the  average
weight  per  shipment  decreased 4.2%. The  tonnage  decrease  was
offset by an 8.0% increase in net revenue per hundredweight due to
rate  increases, a fuel surcharge and a change in freight profile.
Revenues  were also impacted by the shutdown of Redwood Truckload,
the  Company's owner-operator truckload subsidiary, in  the  first
quarter.

Salaries,  wages and benefits decreased 1.3% in 2000 due primarily
to  lower  tonnage levels. However, an April contractual wage  and
benefit  increase, lower use of rail services and $4.0 million  of
severance pay due to an administrative reorganization impacted the
year. Additionally, the lower freight levels had an adverse impact
on pick-up and delivery and dock efficiencies.

Operating expenses increased 6.2% in 2000, despite lower  tonnage,
due  primarily  to continued higher fuel costs and the  change  in
freight  mix. The average fuel cost per gallon increased 63.8%  in
2000.  The Company has a revenue fuel surcharge in place to offset
the  impact  of  the increased fuel costs as permitted  under  the
Company's  rules  tariff.  Continued  higher  information  systems
costs,  revenue equipment lease expense and software amortization,
as  well as lower use of rail services also impacted the year. The
Company  benefited from approximately $17.7 million  of  gains  on
sales  of  terminal real estate properties in  2000,  as  part  of
management's  plan  to  reconfigure the  freight  flow  system  to
improve efficiencies. This compares with $3.4 million of gains  in
1999.

Purchased transportation decreased 13.0% in 2000 due to lower  use
of  rail. Rail miles as a percentage of inter-city miles decreased
to  24.4%  from 27.4% in 1999 due to lower tonnage.  The  decrease
also reflects lower use of owner-operators due to the shutdown  of
Redwood Truckload.

Operating taxes and licenses increased marginally in 2000  as  the
impact  of lower tonnage was offset by higher licensing costs  due
to  changes  in the fleet. Claims and insurance expense  increased
12.5% in 2000, despite lower tonnage, due to continued higher cost
vehicular accidents and higher cargo claims.

Depreciation  decreased 1.1% as a higher proportion of  the  fleet
became fully depreciated.

Operating income decreased $9.8 million in 2000 to a loss of  $1.9
million.  The operating ratio deteriorated to 100.1%  from  99.7%.
The  Company's  Canadian operations contributed $12.7  million  of
operating income in 2000 compared to $11.3 million in 1999.

Other expense, net increased $6.5 million in 2000 primarily due to
a  $4.0 million charge for settlement of a tax liability with CNF,
the former parent, interest expense on tax obligations payable  to
CNF  and  lower  investment  income on  the  Company's  short-term
investments. The Company earned lower investment income in 2000 as
short-term  investments  were used for  working  capital,  capital
expenditures and share repurchases.

The Company's effective income tax rates differ from the statutory
federal  rate  due primarily to foreign and state taxes  and  non-
deductible items.



Comparison of 1999 and 1998

Revenues  for  the  year ended December 31,  1999  increased  6.3%
compared  to 1998 due to a 0.9% tonnage increase, a 3.6%  increase
in  net  revenue  per hundredweight and increased  revenues  from
Redwood Truckload. Net revenue per hundredweight increased due  to
rate  increases and the implementation of a fuel surcharge in July
1999.  Shipments  increased  3.9% while  the  average  weight  per
shipment  decreased 2.9%. During 1999, the Company benefited  from
increased PrimeTime business and continued expansion of  its  two-
day  service  offering.  The  Company  also  received  incremental
business  from existing customers following the mid-year  shutdown
of two major LTL carriers.

Salaries,  wages  and  benefits increased  4.9%  in  1999  due  to
increased tonnage levels and an April contractual wage and benefit
increase.   As  noted  above,  the  Company  received  incremental
business  from the shutdown of two major LTL carriers in mid-1999.
Unfortunately,  a  high  proportion of this  incremental  business
consisted  of light and bulky shipments, which adversely  impacted
pick-  up  and  delivery  and dock efficiencies.  These  increased
expenses  were partially offset by reduced incentive compensation.
1998 includes a $14.4 million non-cash charge for the issuance  of
common stock under the Company's restricted stock plan.

Operating  expenses  increased 15.9%  in  1999  primarily  due  to
increased tonnage levels, a 25% increase in the average fuel  cost
per  gallon  and the change in freight mix. The Company  was  also
impacted  by  higher  information systems  costs,  start-up  costs
associated  with the continued expansion of the Company's  two-day
service,  costs  related  to  the  Company's  Year  2000  project,
increased  revenue  equipment lease expense  and  a  $3.0  million
charge  for  the  write-off  of a disappointing  software  package
implementation. The Company benefited from $3.4 million  of  gains
on sales of terminal real estate properties in 1999. There were no
gains on sales of terminal real estate properties in 1998.

Purchased  transportation increased 15.2% in 1999 due to increased
tonnage  levels,  increased use of owner-operators  for  truckload
operations, costs associated with the Company's growing  PrimeTime
service  and  increased  rail costs per  mile.  Rail  miles  as  a
percentage  of inter-city miles decreased to 27.4% from  28.0%  in
1998.

Operating  taxes  and  licenses increased 13.6%  in  1999  due  to
increased tonnage levels and increased property taxes on  terminal
properties.

Claims  and  insurance  expense increased 21.3%  in  1999  due  to
increased  tonnage  levels, higher cost  vehicular  accidents  and
higher than anticipated cargo claims.

Depreciation  increased  7.1% in 1999  due  to  increased  capital
expenditures  in  1999  for  the  replacement  of  older   revenue
equipment.

Operating income in 1999 decreased $44.2 million from 1998 to $7.9
million  with  the  operating ratio deteriorating  to  99.7%  from
97.7%.  The  Company's  Canadian  subsidiaries  contributed  $11.3
million in 1999 compared with $10.5 million in 1998.

Other expense, net increased $1.6 million in 1999 due primarily to
a  $2.3 million decrease in investment income, which was partially
offset by a $1.1 million gain on sale of a non-operating property.
The  Company earned lower investment income in 1999 as  short-term
investments were used for capital expenditures.

The Company's effective income tax rates differ from the statutory
federal  rate  due primarily to foreign and state taxes  and  non-
deductible items.


Risk Factors

Declining Market Share: The Company is faced with a decline of its
market share in the "greater than 1,500 miles" length-of-haul  due
to  market trends such as the "regionalization" of freight due  to
just-in-time  inventory  practices,  distributed  warehousing  and
other  changes  in business processes. Also contributing  to  this
decline  are  longer length-of-haul service offerings by  regional
and  parcel carriers. To grow, the Company must continue to invest
in  its infrastructure to become more competitive and efficient in
shorter  length-of-haul lanes; improve efficiencies  in  its  core
longer  length-of-haul  lanes, and develop  services  tailored  to
customer needs.

Economic   Growth:  The  less-than-truckload  industry  (LTL)   is
affected  by  the state of the overall economy, which affects  the
amount of freight to be transported. A decline in general economic
growth  may significantly impact the Company's performance through
a reduction in revenues with minimal reduction in cost.

Price Stability: Continuing pricing discipline amongst competitors
and  reduced  industry capacity has contributed to relative  price
stability over the last several years. Competitive action  through
price   discounting   may  significantly  impact   the   Company's
performance through a reduction in revenue with minimal  reduction
in cost.

Cyclicality and Seasonality: The months of September, October  and
November  of  each year usually have the highest  business  levels
while  the  first  quarter has the lowest.  The  LTL  industry  is
affected  by  seasonal fluctuations, which affect  the  amount  of
freight to be transported. Freight shipments and operating results
are also affected adversely by inclement weather conditions.

Market  Risk:  The Company is subject to market risks  related  to
changes  in  interest rates and foreign currency  exchange  rates,
primarily   the  Canadian  dollar  and  Mexican  peso.  Management
believes  that  the  impact on the Company's  financial  position,
results of operations and cash flows from fluctuations in interest
rates  and  foreign currency exchange rates would not be material.
Consequently,   management  does  not  currently  use   derivative
instruments to manage these risks; however, it may do  so  in  the
future.

Inflation: As discussed above, the Company continued to experience
significant increases in the average fuel cost per gallon in 2000.
The  Company's rules tariff implements a fuel surcharge  when  the
average  cost per gallon of on-highway diesel fuel exceeds  $1.10,
as  determined from the Energy Information Administration  of  the
Department  of  Energy's publication of weekly  retail  on-highway
diesel prices. This provision of the rules tariff became effective
in  July 1999. However, there can be no assurance that the Company
will  be able to maintain this surcharge or successfully implement
such surcharges in response to increased fuel costs in the future.


Outlook

During  the fourth quarter of 2000, management began  implementing
an  aggressive, strategic marketing plan emphasizing the strengths
of  the  Company's  long haul infrastructure. Part  of  this  plan
includes  emphasizing  higher  quality,  more  profitable   weight
brackets, specifically 300 to 15,000 lbs., in the greater than 500
mile  length  of  haul.  Management will also  continue  with  its
efforts  to  grow  in  the  two  day lanes.  To  improve  margins,
management is implementing several aggressive, systematic  process
improvement programs aimed at increasing efficiencies  in  pick-up
and  delivery  and  dock operations, increasing  load  factor  and
reducing  claims expense. The cost savings should help  offset  an
April 1, 2001 wage and benefit increase averaging 3.4% which  will
add   approximately  $24  to  $27  million  of  expense  in  2001.
Management  currently  expects to return to profitability  in  the
third  quarter  of  2001. However, until tonnage  levels  improve,
continuing infrastructure costs will adversely impact profits.  As
part  of  an  administrative reorganization to reduce  costs,  the
Company   is   consolidating   its  corporate   headquarters   and
administrative offices to a single facility in Vancouver, WA.  The
proceeds  from  the  eventual sales of  its  Menlo  Park,  CA  and
Portland, OR facilities will be reinvested back into high priority
real  estate  and capital investments that will provide  long-term
value to the Company.

As discussed in Footnote 9 in the Company's Consolidated Financial
Statements, there are approximately 1,160,000 shares granted under
the Company's restricted stock plan that had not achieved the pre-
determined  increases in stock price required for  vesting  as  of
December  31.  Compensation expense will be recognized  for  those
shares once the stock price meets the required levels.


Liquidity and Capital Resources

As of December 31, 2000, the Company had $46.5 million in cash and
cash  equivalents. Net cash provided by operating  activities  for
2000 was $21.1 million compared with $21.5 million in 1999. It  is
anticipated that existing cash balances, cash flow from operations
and   available   borrowings   under   the   Company's   financing
arrangements  will be sufficient for working  capital requirements
in 2001.

Net  cash  used by investing activities was $22.7 million compared
with  $82.9  million  in the same period last year.  The  decrease
reflects  lower  capital  and  software  expenditures  and  higher
proceeds  from  sales  of  real estate  terminal  properties.  The
decrease in capital expenditures reflects management's decision to
scale  expenditures  back in line with business  levels.  Software
expenditures decreased as the prior year includes costs to replace
certain  operational and financial software systems for Year  2000
compliance.  Management expects capital and software  expenditures
to  be approximately $80.0 million in 2001, primarily for upgrades
to  terminal properties, technology enhancements and the  purchase
of  revenue  equipment. It is anticipated that those  expenditures
will   be  funded  with  existing  cash  balances  and  cash  from
operations,  supplemented by financing arrangements. Additionally,
as  part  of  an  administrative reorganization,  the  Company  is
consolidating   its  corporate  headquarters  and   administrative
offices  to a single facility in Vancouver, WA. The proceeds  from
the  eventual  sales  of  its  Menlo Park,  CA  and  Portland,  OR
facilities will be reinvested back into high
priority  real  estate and capital investments that  will  provide
long-term value to the Company.

Net  cash  used  by financing activities of $1.0 million  reflects
repayment  of  short-term borrowings assumed in  the  purchase  of
FirstAir,   Inc.  and  repurchases  of  common  stock.  Management
repurchased  60,000  shares  during  2000  and  is  authorized  to
repurchase an additional $19.5 million of common stock.

On September 27, 2000, the Company's unsecured credit facility was
amended, the primary effect of which was a reduction in the  total
facility  from $175.0 million to $155.0 million. Borrowings  under
the  agreement bear interest at LIBOR plus a margin (0.625% as  of
December  31, 2000). As of December 31, 2000, the Company  had  no
short-term  borrowings  and $96.9 million  of  letters  of  credit
outstanding. The continued availability of funds under this credit
facility  will  require  that  the  Company  comply  with  certain
financial  covenants, the most restrictive of which  requires  the
Company to maintain a minimum tangible net worth. The Company  was
in  compliance with all covenants as of December 31, 2000. Due  to
continued lower business levels in the first quarter of 2001,  the
Company may violate the tangible net worth covenant of its  credit
agreement  at March 31st. The Company also has an operating  lease
agreement with the same lender covering 2,700 trucks and tractors,
which is subject to the same covenant. The Company has received  a
commitment  from  a new lender for a $200 million credit  facility
securitized  with  accounts receivable.  The  new  agreement  will
provide  for  short-term borrowings and letter  of  credit  needs.
Approximately $140 million of the facility will be used  to  repay
short-term  borrowings and support letters  of  credit  under  the
existing credit agreement as well as to purchase the 2,700  trucks
and  tractors under lease. It is anticipated that the new facility
will  be  in place by March 30, 2001. If the Company is unable  to
complete  this  transaction, the Company will, if  required,  seek
covenant  relief  in  the  form  of  credit  and  lease  agreement
amendments  and/or waivers, though there can be no assurance  that
the current lenders will grant them. However, the Company believes
there are a number of other viable financing options available  to
the Company.

During  the year, the Company completed operating lease agreements
for  approximately  930 trailers. Incremental lease  payments  are
expected  to be approximately $2.2 million annually through  2007.
These new units are replacements for older equipment.

As  discussed  in  Footnote 10 "Contingencies," in  the  Company's
Consolidated Financial Statements, the Company has executed a  tax
settlement agreement with CNF that calls for a full settlement  of
the  tax sharing liability with CNF, except for certain enumerated
open tax items that are anticipated to be resolved within the next
18 to 24 months. The settlement entailed an immediate cash payment
of  $16.7  million, transfer of approximately $1 million  of  real
property, and the acknowledgement of tax obligations in the amount
of   $40.2   million.  Of  this  amount,  $20.0  million   remains
outstanding  as of December 31, 2000, and is payable  on  May  15,
2004,  bearing interest at 6.8% payable annually. As  of  December
31,  2000,  the Company believes that it has accrued the necessary
reserves  to  adequately provide for its entire liability  to  CNF
under the tax sharing agreement.

As  of December 31, 2000, the Company's ratio of long-term debt to
total capital was 5.6% compared with 5.5% as of December 31, 1999.
The  current  ratio was 1.3 to 1 and 1.2 to 1 as of  December  31,
2000 and 1999, respectively.


Other

On  May  8, 2000, the Board of Directors elected Patrick H.  Blake
president,  chief executive officer and a director of the  Company
and chairman and chief executive officer of CF, the Company's long-
haul  subsidiary. He replaces Vice Chairman of the Board G. Robert
Evans, who served as interim CEO after the retirement of W.  Roger
Curry  in  January. Mr. Blake previously served as executive  vice
president of operations and chief operating officer of the Company
and president and chief operating officer of CF. The Board elected
Thomas  A.  Paulsen  to  fill Mr. Blake's  previous  positions  as
president  and  chief operating officer of CF and chief  operating
officer  of  the  Company. He previously  served  as  senior  vice
president of operations.

On  July  5,  2000,  the  Board  of Directors  elected  Robert  E.
Wrightson executive vice president and chief financial officer  of
the  Company.  He  replaces Sunil Bhardwaj, who  served  as  chief
financial  officer and treasurer before leaving the  company.  Mr.
Wrightson   previously  served  as  senior  vice   president   and
controller of the Company. On August 15, 2000, James R. Tener  was
promoted  to  vice  president  and controller,  having  previously
served  as  director of financial accounting. Also on  August  15,
Kerry  K.  Morgan  was promoted to vice president  and  treasurer,
having previously served as director of treasury and planning. The
Company  has  received  notices from the Environmental  Protection
Agency  (EPA)  and  others  that  it  has  been  identified  as  a
potentially   responsible  party  (PRP)  under  the  Comprehensive
Environmental Response Compensation and Liability Act (CERCLA)  or
other   Federal  and  state  environmental  statutes  at   various
Superfund  sites.  Under CERCLA, PRP's are jointly  and  severally
liable  for  all  site remediation and expenses.  Based  upon  the
advice of local environmental attorneys and cost studies performed
by  environmental engineers hired by the EPA (or other Federal  or
state agencies), the Company believes its obligations with respect
to  such  sites  would not have a material adverse effect  on  its
financial position or results of operations.

Certain  statements included or incorporated by  reference  herein
constitute  "forward-looking statements"  within  the  meaning  of
Section 27A of the Securities Act of 1933, as amended, and Section
21E  of  the Securities Exchange Act of 1934, as amended, and  are
subject  to a number of risks and uncertainties. Any such forward-
looking  statements included or incorporated by  reference  herein
should not be relied upon as predictions of future events. Certain
such  forward-looking statements can be identified by the  use  of
forward-looking terminology such as "believes," "expects,"  "may,"
"will,"  "should,"  "seeks," "approximately," "intends,"  "plans,"
"pro forma," "estimates," or "anticipates" or the negative thereof
or  other  variations  thereof or comparable  terminology,  or  by
discussions of  strategy, plans or intentions. Such forward-looking
statements are necessarily dependent on assumptions, data or methods
that may be  incorrect  or  imprecise and they may be  incapable of
being realized. In that regard, the following factors, among others,
and in addition to matters discussed elsewhere herein and in documents
incorporated by reference herein, could cause actual  results  and
other  matters  to differ materially from those in  such  forward-
looking  statements: general economic conditions; general business
conditions of customers served and other shifts in market  demand;
increases  in  domestic  and  international  competition;  pricing
pressures, rate levels and capacity in the motor-freight industry;
future  operating costs such as employee wages and benefits,  fuel
prices   and  workers  compensation  and  self-insurance   claims;
shortages  of  drivers; weather; environmental  and  tax  matters;
changes  in  governmental  regulation;  technology  costs;   legal
claims;  timing and amount of capital expenditures; and successful
execution   of  operating  plans,  customer  service  initiatives,
marketing  plans,  process and operational improvements  and  cost
reduction  efforts described above. As a result of the  foregoing,
no  assurance  can be given as to future results of operations  or
financial condition.





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


                                                      2000             1999

ASSETS

Current Assets
  Cash and cash equivalents (Note 2)            $    46,523      $    49,050
  Trade accounts receivable, net  (Note 2)          327,919          343,198
  Other accounts receivable                          14,978            6,524
  Operating supplies, at lower of average cost
      or market                                       8,419            9,268
  Prepaid expenses                                   41,286           41,405
  Deferred income taxes  (Notes 2 and 7)             70,610           21,567
    Total Current Assets                            509,735          471,012


Property, Plant and Equipment, at cost  (Note 2)
  Land                                               81,697           82,701
  Buildings and improvements                        350,137          354,012
  Revenue equipment                                 518,086          545,129
  Other equipment and leasehold improvements        149,123          139,408
                                                  1,099,043        1,121,250
  Accumulated depreciation and amortization        (750,249)        (752,298)
                                                    348,794          368,952

Other Assets
  Deposits and other assets  (Note 2)                68,153           57,712
  Deferred income taxes  (Notes 2 and 7)                 -            18,596
                                                     68,153           76,308

Total Assets                                     $  926,682       $  916,272


            The accompanying notes are an integral part of these statements.


<TABLE>
<CAPTION>
                                CONSOLIDATED FREIGHTWAYS CORPORATION
                                           AND SUBSIDIARIES
                                      CONSOLIDATED BALANCE SHEETS
                                            December 31,
                                       (Dollars in thousands)



                                                                     2000            1999
<S>
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities                                             <C>             <C>
  Accounts payable                                               $   97,741      $   98,701
  Accrued liabilities  (Note 4)                                     211,043         202,287
  Accrued claims costs  (Note 2)                                     86,674          78,584
  Federal and other income taxes  (Note 7)                                -          16,883
    Total Current Liabilities                                       395,458         396,455

Long-Term Liabilities
  Long-term debt   (Note 5)                                          15,100          15,100
  Accrued claims costs  (Note 2)                                     99,074          97,839
  Employee benefits (Note 8)                                        120,317         121,783
  Deferred income taxes  (Notes 2 and 7)                              6,282               -
  Other liabilities                                                  38,267          26,533
    Total Liabilities                                               674,498         657,710

Shareholders' Equity
Preferred stock, $.01 par value; authorized 5,000,000 shares;
   issued none                                                            -               -
Common stock, $.01 par value; authorized 50,000,000 shares;
   issued 23,133,848 shares                                             231             231
Additional paid-in capital                                           75,767          77,406
Accumulated other comprehensive loss                                (11,293)        (10,087)
Retained earnings                                                   200,067         207,632
Treasury stock, at cost  (1,436,712 and 1,863,691 shares,
      respectively)                                                 (12,588)        (16,620)
  Total Shareholders' Equity                                        252,184         258,562

Total Liabilities and Shareholders' Equity                         $926,682        $916,272


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


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



                                                    2000            1999            1998
<S>                                              <C>             <C>             <C>
REVENUES                                         $ 2,352,368     $ 2,379,000     $ 2,238,423

COSTS AND EXPENSES
    Salaries, wages and benefits                   1,496,663       1,516,978       1,445,899
    Operating expenses                               451,882         425,580         367,098
    Purchased transportation                         207,788         238,944         207,388
    Operating taxes and licenses                      69,825          69,382          61,090
    Claims and insurance                              76,176          67,685          55,804
    Depreciation                                      51,961          52,556          49,080
                                                   2,354,295       2,371,125       2,186,359
OPERATING INCOME (LOSS)                               (1,927)          7,875          52,064

OTHER INCOME (EXPENSE)
  Investment income                                    1,490           2,688           4,957
  Interest expense                                    (4,883)         (4,160)         (4,012)
  Miscellaneous, net                                  (4,904)           (375)         (1,192)
                                                      (8,297)         (1,847)           (247)


Income (loss) before income taxes (benefits)         (10,224)          6,028          51,817
Income taxes (benefits) (Note 7)                      (2,659)          3,315          25,471

NET INCOME (LOSS)                                $    (7,565)    $     2,713     $    26,346

Basic average shares outstanding (Note 2)         21,492,130      22,349,997      22,634,362
Diluted average shares outstanding (Note 2)       21,492,130      22,556,275      23,510,752

Basic Earnings (Loss) per Share: (Note 2)        $     (0.35)    $      0.12     $      1.16

Diluted Earnings (Loss) per Share: (Note 2)      $     (0.35)    $      0.12     $      1.12

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



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


                                                                            2000        1999         1998
<S>                                                                      <C>         <C>           <C>
Cash and Cash Equivalents, Beginning
  of Year                                                                $ 49,050    $ 123,081     $ 107,721

Cash Flows from Operating Activities
  Net income (loss)                                                        (7,565)       2,713        26,346
  Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
    Depreciation and amortization                                           59,152      58,363        50,918
    Increase (decrease) in deferred income taxes (Note 7)                  (21,690)    (15,379)        3,498
    (Gains) losses from property disposals, net                            (17,514)     (4,286)           94
    Issuance of common stock under stock and
       benefit plans (Notes 8 and 9)                                         2,660         289        14,449
    Changes in assets and liabilities:
      Receivables                                                            8,478     (48,064)       19,243
      Accounts payable                                                      (3,733)     13,840         1,734
      Accrued liabilities                                                    8,156      14,759       (25,116)
      Accrued claims costs                                                   9,294         (93)      (17,680)
      Income taxes                                                         (16,883)      2,710         6,467
      Employee benefits                                                     (1,466)      4,547         2,016
      Other                                                                  2,244      (7,886)       (8,127)
Net Cash Provided by Operating Activities                                   21,133      21,513        73,842

Cash Flows from Investing Activities
  Capital expenditures                                                     (42,348)    (67,273)      (31,271)
  Software expenditures                                                     (5,963)    (27,938)      (17,574)
  Proceeds from sales of property                                           26,785      12,308         2,918
  Acquisition of FirstAir Inc., net of cash acquired (Note 3)               (1,176)          -             -
Net Cash Used by Investing Activities                                      (22,702)    (82,903)      (45,927)

Cash Flows from Financing Activities
  Net repayment of short-term borrowings                                      (691)          -             -
  Purchase of treasury stock                                                  (267)    (12,641)      (12,555)
Net Cash Used by Financing Activities                                         (958)    (12,641)      (12,555)

Increase (Decrease) in Cash and Cash Equivalents                            (2,527)    (74,031)       15,360

Cash and Cash Equivalents, End of Year                                  $   46,523   $  49,050     $ 123,081


Supplemental Disclosure
Cash paid for income taxes                                              $   19,731   $  14,469     $  15,104
Cash paid for interest                                                  $    1,606   $   2,349     $   1,327


<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)


                                                                                 Accumulated
                                                    Common Stock   Additional       Other
                                              Number of              Paid-in    Comprehensive  Retained    Treasury
                                               Shares     Amount     Capital    Income (Loss)  Earnings  Stock, at cost   Total

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

 Comprehensive income (loss) (Note 2)
    Net income                                        -       -            -             -       26,346         -         26,346
    Foreign currency translation adjustment           -       -            -        (4,993)           -         -         (4,993)
 Total comprehensive income                                                                                               21,353
 Purchase of 1,448,174 treasury shares                -       -            -             -            -   (12,555)       (12,555)
 Issuance of common stock under employee
   stock plans (Note 9)                          28,468       1           23             -            -         -             24
 Issuance of 988,639 treasury shares under
   employee stock plans (Note 9)                      -       -        5,819             -            -     8,630         14,449
Balance, December 31, 1998                   23,066,905     231       77,303       (11,565)     204,919    (4,170)       266,718

 Comprehensive income (Note 2)
    Net income                                        -       -            -             -        2,713         -          2,713
    Foreign currency translation adjustment           -       -            -         1,478            -         -          1,478
 Total comprehensive income                                                                                                4,191
 Purchase of 1,407,725 treasury shares                -       -            -             -            -   (12,641)       (12,641)
 Issuance of 21,720 treasury shares under
   employee stock plans (Note 9)                      -       -           98             -            -       191            289
 Issuance of common stock under employee
   stock plans (Note 9)                          66,943       -            5             -            -         -              5
Balance, December 31, 1999                   23,133,848     231       77,406       (10,087)     207,632   (16,620)       258,562

 Comprehensive income (loss) (Note 2)
    Net loss                                          -       -            -             -       (7,565)         -        (7,565)
    Foreign currency translation adjustment           -       -            -        (1,206)           -          -        (1,206)
 Total comprehensive loss                                                                                                 (8,771)
 Purchase of 60,000 treasury shares                   -       -            -             -            -      (267)          (267)
 Issuance of 69,045 treasury shares under
   employee stock plans (Note 9)                      -       -        (359)             -            -       609            250
 Issuance of 390,707  treasury shares under
   employee benefit plan (Note 8)                     -       -      (1,185)             -            -     3,450          2,265
 Issuance of 27,227  treasury shares for
   payment of non-employee director fees              -       -         (95)             -            -       240            145

Balance, December 31, 2000                   23,133,848   $ 231    $ 75,767      $ (11,293)   $ 200,067 $ (12,588)    $  252,184


<FN>

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






            CONSOLIDATED FREIGHTWAYS CORPORATION
                      AND SUBSIDIARIES
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   Description of Business

Consolidated Freightways Corporation (the Company) primarily
provides  less-than-truckload  transportation,  air  freight
forwarding  and supply chain management services  throughout
the United States and Canada, as well as in Mexico through a
joint  venture,  and international freight services  between
the  United States and more than 80 countries. The  Company,
incorporated   in  the  state  of  Delaware,   consists   of
Consolidated   Freightways  Corporation   of   Delaware,   a
nationwide  motor  carrier,  and  its  Canadian  operations,
including Canadian Freightways Ltd., Epic Express,  Milne  &
Craighead,   Canadian   Sufferance   Warehouses,   Blackfoot
Logistics,  and  other  related  businesses;  CF  AirFreight
Corporation,  a  non-asset based provider  of  domestic  and
international air freight forwarding and full and less-than-
container  load  ocean freight transportation;  and  Redwood
Systems,  Inc.,  a  non-asset based supply chain  management
services provider.

2.   Summary of Significant Accounting Policies

Principles  of Consolidation: The accompanying  consolidated
financial statements include the accounts of the Company and
its  wholly owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.

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 $12,887,000 and $13,340,000 as  of
December 31, 2000 and 1999, respectively.

Property, Plant and Equipment, at cost: 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 and operating properties are recorded in operating
expenses.

Software  Costs:  The  Company  capitalizes  the  costs   of
purchased  and  internally developed software in  accordance
with  American  Institute  of Certified  Public  Accountants
Statement  of  Position 98-1  Accounting for  the  Costs  of
Computer  Software Developed or Obtained for Internal  Use."
Deposits  and  Other  Assets on   the  Consolidated  Balance
Sheets includes $39,284,000 and $38,850,000 of purchased and
internally developed software costs as of December 31,  2000
and 1999, respectively. These costs are being amortized over
5 years.

Goodwill: Goodwill, which represents the costs in excess  of
net  assets  of  businesses  acquired,  is  capitalized  and
amortized  on  a straight-line basis over 20  to  40  years.
Goodwill,  net  of accumulated amortization, was  $3,893,000
and   $1,905,000   as  of  December  31,  2000   and   1999,
respectively, and is included in Deposits and  Other  Assets
on the Consolidated Balance Sheets.

Impairment  of  Long-Lived Assets: The Company  reviews  its
long-lived  assets, including identifiable intangibles,  for
impairment when events or changes in circumstances  indicate
that   the  carrying  value  of  such  assets  may  not   be
recoverable. The Company compares the carrying value of  the
asset  with  the  asset's expected future undiscounted  cash
flows.  If  the  carrying value of  the  asset  exceeds  the
expected  future cash flows, an impairment exists  which  is
measured  by the excess of the carrying value over the  fair
value of the asset. No impairment losses were recognized  in
2000, 1999 or 1998.

Income  Taxes: The Company follows the liability  method  of
accounting for income taxes.

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.

Translation  of  Foreign  Currency:  Local  currencies   are
generally considered to be the functional currencies outside
the  United  States. The Company translates the  assets  and
liabilities  of its foreign operations at the exchange  rate
in effect at the balance sheet date. Income and expenses are
translated  using the average exchange rate for the  period.
The  resulting translation adjustments are reflected in  the
Statements    of    Consolidated    Shareholders     Equity.
Transactional  gains and losses are included in  results  of
operations.

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 the in-transit
or completed service methods of recognition.

Interest  Expense:  The interest expense  presented  in  the
Statements   of  Consolidated  Operations  is   related   to
industrial revenue bonds, as discussed in Footnote 5, "Long-
Term  Debt,"  and long-term tax liabilities, as discussed  in
Footnote 7,  "Income Taxes."

Earnings  (Loss) per Share: Basic earnings (loss) per  share
is   calculated  using  only  the  weighted  average  shares
outstanding  for  the  period. Diluted earnings  (loss)  per
share  includes the dilutive effect of restricted stock  and
stock  options. See Footnote 9, "Stock Compensation  Plans."
The  year  ended  December 31, 2000 does not  include  6,165
potentially dilutive securities in the computation of  fully
diluted  earnings per share because to do so would be  anti-
dilutive.

The  following  chart reconciles basic to  diluted  earnings
(loss) per share for the years ended December 31, 2000, 1999
and 1998:

(Dollars in thousands except per share amounts)


                          Net           Weighted    Earnings
                         Income          Average   (Loss) Per
Years Ended              (Loss)           Shares      Share
December 31, 2000
Basic                    $ (7,565)    21,492,130     $(0.35)
Dilutive effect of
   restricted stock and
   stock options                -              -          -
Diluted                  $ (7,565)    21,492,130     $(0.35)

December 31, 1999
Basic                    $  2,713     22,349,997     $ 0.12
Dilutive effect of
    restricted stock and
    stock options               -        206,278          -
Diluted                  $  2,713     22,556,275     $ 0.12

December 31, 1998
Basic                    $ 26,346     22,634,362     $ 1.16
Dilutive effect of
    restricted stock            -        876,390      (0.04)
Diluted                  $ 26,346     23,510,752     $ 1.12


Comprehensive Income: Comprehensive income (loss) includes
all changes in equity during a period except those resulting
from investments by and distributions to owners. Comprehensive
income (loss) for the years ended December 31, 2000, 1999 and
1998 is presented in the Statements of Consolidated Shareholders
Equity.

Estimates: Management makes estimates and assumptions when
preparing the financial statements in conformity with
accounting principles generally accepted in the United
States. 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: The Financial  Accounting
Standards  Board  issued Statement of  Financial  Accounting
Standards   (SFAS)   No.  137  Accounting   for   Derivative
Instruments  and  Hedging  Activities    Deferral   of   the
Effective  Date of FASB Statement No. 133 (SFAS 133).   SFAS
133,  Accounting  for  Derivative  Instruments  and  Hedging
Activities,   requires  that an organization  recognize  all
derivatives  as either assets or liabilities on the  balance
sheet   at   fair  value  and  establishes  the  timing   of
recognition  of  the  gain/loss based upon  the  derivatives
intended  use.  Based upon SFAS No. 137,  the  Company  will
adopt  the provisions of SFAS 133 in the quarter ended March
31,  2001. Management does not expect that adoption of  this
standard  will  have  a material effect  on  the  Company's
financial position or results of operations.

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


3.   Acquisition

On  June 2, 2000, CF AirFreight Corporation, a wholly  owned
subsidiary of the Company, acquired substantially all of the
assets  and liabilities of privately held FirstAir, Inc.,  a
non-asset  based provider of domestic and international  air
freight  forwarding  and  full and less-than-container  load
ocean  freight transportation. The purchase price  was  $1.2
million  in cash and assumption of certain liabilities.  The
acquisition has been accounted for under the purchase method
of  accounting, and accordingly, the purchase price has been
allocated to assets purchased and liabilities assumed  based
upon  the fair values at the date of acquisition. The excess
of  the  purchase price over the fair values of  the  assets
acquired  and  liabilities assumed  was  approximately  $2.3
million,  which is being amortized on a straight line  basis
over  20 years. The purchase agreement also provides  for  a
contingent  payment to the former owner if  revenues  exceed
certain  targeted levels before May 31, 2003. The contingent
payment  shall not exceed $2.5 million. A payment,  if  any,
will be recorded as additional purchase price. The operating
results  of  FirstAir have been included  in  the  Company's
consolidated  financial  statements  since   the   date   of
acquisition.  Operating results prior to  acquisition  would
have  had  an immaterial effect on the Company's results  of
operations.



4.  Accrued Liabilities

Accrued liabilities consisted of the following as of December 31:

(Dollars in thousands)
                                           2000        1999
Accrued payroll and benefits            $ 90,459    $ 89,568
Other accrued liabilities                 68,194      62,714
Accrued union health and welfare          23,845      23,952
Accrued taxes other than income taxes     18,991      19,776
Accrued interest                           9,554       6,277
Total accrued liabilities               $211,043    $202,287



5.  Long-Term Debt

Long-term debt consisted of $15,100,000 of industrial
revenue bonds with rates between 5.15% and 5.25% as of
December 31, 2000. Annual maturities and sinking fund
requirements of this debt as of December 31, 2000 are as
follows: $0 in 2001; $0 in 2002; $1,000,000 in 2003 and
$14,100,000 in 2004.

The  Company has a multi-year $155 million unsecured  credit
facility  with several banks to provide for working  capital
and  letter of credit needs. Borrowings under the  agreement
bear  interest at LIBOR plus a margin (0.625% as of December
31, 2000). As of December 31, 2000, the Company had no short-
term  borrowings  and  $96.9 million of  letters  of  credit
outstanding. The continued availability of funds under  this
credit  facility will require that the Company  comply  with
certain  financial covenants, the most restrictive of  which
requires  the  Company  to maintain a minimum  tangible  net
worth.  The Company was in compliance with all covenants  as
of December 31, 2000. Due to continued lower business levels
in  the  first quarter of 2001, the Company may violate  the
tangible net worth covenant of its credit agreement at March
31st. The Company also has an operating lease agreement with
the same lender covering 2,700 trucks and tractors, which is
subject  to  the same covenant. The Company has  received  a
commitment  from  a  new lender for a  $200  million  credit
facility  securitized  with  accounts  receivable.  The  new
agreement will provide for short-term borrowings and  letter
of  credit needs. Approximately $140 million of the facility
will  be  used  to repay short-term borrowings  and  support
letters  of  credit under the existing credit  agreement  as
well  as  to  purchase the 2,700 trucks and  tractors  under
lease.  It is anticipated that the new facility will  be  in
place  by  March  30,  2001. If the  Company  is  unable  to
complete  this transaction, the Company will,  if  required,
seek  covenant  relief  in  the form  of  credit  and  lease
agreement amendments and/or waivers, though there can be  no
assurance that the current lenders will grant them. However,
the  Company  believes there are a number  of  other  viable
financing options available.

Based  on interest rates currently available to the  Company
for  debt with similar terms and maturities, the fair  value
of  long-term  debt  was equivalent  to  book  value  as  of
December 31, 2000 and 1999.


6.  Leases

The Company is obligated under various non-cancelable leases
that  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, 2000, are $23,097,000 in 2001, $20,478,000  in
2002,  $18,599,000 in 2003, $17,664,000 in 2004,  $8,704,000
in 2005, and $1,910,000 thereafter.

A lease agreement covering 2,700 of the Company's trucks and
tractors  requires  that  the Company  comply  with  certain
financial covenants, the most restrictive of which  requires
the  Company to maintain a minimum tangible net  worth.  The
Company  was in compliance with all covenants as of December
31,  2000.  Please  see Footnote 5 "Long-Term  Debt"  for  a
discussion of issues regarding compliance with the  tangible
net worth covenant as of March 31, 2001.

Rental  expense  for operating leases is  comprised  of  the
following:

(Dollars in thousands)

                          2000     1999        1998
Minimum rentals         $50,950   $48,065    $37,953
Less sublease rentals    (2,209)   (2,707)    (1,809)
Net rental expense      $48,741   $45,358    $36,144


7.  Income Taxes

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

(Dollars in thousands)

                                      2000      1999      1998
Pretax income (loss)
    U.S. corporations             $(22,926)  $ (7,201)   $38,115
    Foreign corporations            12,702     13,229     13,702
Total pretax income (loss)        $(10,224)  $  6,028    $51,817

Income taxes (benefits)
  Current
     U.S. Federal                $(18,615)   $  7,297    $14,244
     State and local               (1,530)      6,024      2,025
     Foreign                        5,494       5,373      5,704
                                  (14,651)     18,694     21,973
Deferred
     U.S. Federal                  10,229     (10,705)     2,615
     State and local                1,181      (5,478)       660
     Foreign                          582         804        223
                                   11,992     (15,379)     3,498
Total income taxes (benefits)    $ (2,659)   $  3,315    $25,471

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:


(Dollars in thousands)

                                                2000      1999
Deferred taxes - current
Assets
     Reserves for accrued claims costs       $ 32,904  $ 25,107
     Employee benefits                         23,261    22,671
     Other reserves not currently deductible   29,209    13,470

Liabilities
     Unearned revenue, net                    (10,550)  (10,134)
     Employee benefits                         (4,214)  (29,547)
Total deferred taxes - current                 70,610    21,567

Deferred taxes  - non current
Assets
     Reserves for accrued claims costs         15,531    33,156
     Employee benefits                         28,233    29,898
     Retiree health benefits                   25,646    24,146
Liabilities
     Depreciation                             (58,443)  (52,797)
     Tax benefits from leasing transactions   (10,520)  (11,913)
     Other                                     (6,729)   (3,894)
Total deferred taxes - non current             (6,282)   18,596

Net deferred taxes                           $ 64,328  $ 40,163


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:

                                      2000      1999      1998
U.S. statutory tax rate              (35.0)%    35.0%     35.0%
State income taxes, net of
  federal income tax benefit          (7.6)      4.0       3.8
Foreign taxes in excess
  of U.S. statutory rate              15.5      16.8       2.2
Non-deductible operating expenses     31.6      91.8       3.5
Fuel tax credits                      (2.1)     (4.2)     (0.4)
Foreign tax credits                  (21.5)    (83.7)        -
Other, net                            (6.9)     (4.7)      5.1
Effective income tax (benefit) rate  (26.0)%    55.0%     49.2%

The  cumulative  undistributed earnings of  the  Company's
foreign  subsidiaries, totaling $68 million as  of  December
31, 2000, which if distributed may be subject to withholding
tax,  have  been  reinvested indefinitely in the  respective
foreign subsidiaries. Therefore, no provision has been  made
for   any   U.S.  tax  applicable  to  foreign  subsidiaries
undistributed  earnings. Taxes paid to foreign jurisdictions
on  distributed foreign earnings may be used, in whole or in
part,  as  credits  against the  U.S.  tax.  The  amount  of
withholding tax that would be payable on remittance  of  the
undistributed  earnings  would  approximate  $3.4   million.
During  2000,  the  company  repatriated  $2.5  million   in
previously   undistributed   earnings   from   its   foreign
subsidiaries resulting in a one-time foreign tax
credit of $2.2 million.

The  Company's former parent, CNF Inc., continues to dispute
certain   tax  issues  with  the  Internal  Revenue  Service
relating to the taxable years prior to the spin-off  of  the
Company. The issues arise from tax positions first taken  by
the former parent in the mid-1980' s.

Under  a tax sharing agreement entered into between CNF  and
the  Company  at  the time of the spin-off, the  Company  is
obligated  to reimburse the former parent for its  share  of
any additional taxes and interest that relate to the Company
s business prior to the spin-off. The Company has executed a
tax settlement agreement that calls for a full settlement of
the  tax  sharing  liability, except for certain  enumerated
open tax items that are anticipated to be resolved within the
next  18  to 24 months. The settlement entailed an immediate
cash payment of $16.7 million, transfer of approximately  $1
million  of  real property, and the acknowledgement  of  tax
obligations in the amount of $40.2 million. Of this  amount,
$20.0  million remains outstanding as of December 31,  2000,
and  is  payable on May 15, 2004, bearing interest  at  6.8%
payable  annually. The net effect of the settlement payments
to  CNF  on  the  Company s deferred taxes was approximately
$33.7  million.  The settlement primarily  affected  current
Employee Benefits and current Other Reserves. As of December
31,  2000,  the  Company believes that it  has  accrued  the
necessary  reserves  to adequately provide  for  its  entire
liability to CNF under the tax sharing agreement.


8.    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 94% 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:

(Dollars in thousands)
                                          2000        1999
Change in Benefit Obligation
     Benefit obligation at beginning
        of year                         $271,074     $277,083
     Service cost                          7,856        8,418
     Interest cost                        22,880       20,291
     Benefit payments                    (13,499)     (11,456)
     Actuarial (gain) loss                18,246      (23,262)
Benefit obligation at end of year       $306,557     $271,074

Change in Fair Value of Plan Assets
     Fair value of plan assets
       at beginning of year             $308,081     $268,398
     Actual return on plan assets           (827)      51,139
     Benefit payments                    (13,499)     (11,456)
Fair value of plan assets at end
       of year                          $293,755     $308,081


(Dollars in thousands)
                                           2000           1999
Funded Status of the Plan
     Funded status at end of year      $ (12,802)      $ 37,007
     Unrecognized net actuarial gain     (39,228)       (90,923)
     Unrecognized prior service cost       4,885          5,942
     Unrecognized net transition asset    (3,311)        (4,414)
Accrued Pension Plan Liability         $ (50,456)     $ (52,388)

Weighted-average assumptions as of December 31:

                                          2000           1999
Discount rate                              7.75%         8.0%
Expected return on plan assets             9.5 %         9.5%
Rate of compensation increase              5.0 %         5.5%


Net pension cost (benefits) includes the following:

(Dollars in thousands)

                                              2000      1999      1998
Components of net pension cost (benefits)
     Service cost                          $  7,856  $  8,418  $  7,252
     Interest cost                           22,880    20,291    18,661
     Expected return on plan assets         (28,700)  (24,963)  (22,758)
     Amortization of:
          Transition asset                   (1,104)   (1,104)   (1,103)
          Prior service cost                  1,057     1,057     1,057
          Actuarial gain                     (3,921)     (253)   (1,799)
Total net pension cost (benefits)         $  (1,932) $  3,446  $  1,310

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,  2000
and  1999,  the  liability  was $3,024,000  and  $1,901,000,
respectively. The pension cost was $1,319,000, $421,000  and
$315,000  for  the years ended December 31, 2000,  1999  and
1998, respectively.

Approximately  81% of the Company's domestic  employees  are
covered  by union-sponsored, collectively bargained,  multi-
employer pension plans. The Company contributed and  charged
to  expense $137,087,000 in 2000, $131,470,000 in  1999  and
$123,882,000  in  1998 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 that  provides
benefits  to non-contractual employees at least 55 years  of
age  with  ten 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:

(Dollars in thousands)
                                              2000        1999
Change in Benefit Obligation
     Benefit obligation at beginning
         of year                           $ 57,526     $ 59,883
     Service cost                               471          548
     Interest cost                            4,214        4,221
     Benefit payments                        (4,145)      (3,515)
     Actuarial gain                          (2,091)      (3,611)
Benefit obligation at end of year          $ 55,975     $ 57,526


(Dollars in thousands)
                                             2000        1999
Change in Fair Value of Plan Assets
     Fair value of plan assets
          at beginning of year             $     -      $     -
     Company contributions                   4,145         3,515
     Benefit payments                       (4,145)       (3,515)
     Fair value of plan assets at
          end of year                      $     -      $      -


Funded Status of the Plan
   Funded status at end of year            $(55,975)    $(57,526)
   Unrecognized net actuarial gain          (10,429)      (8,863)
   Unrecognized prior service credit           (221)        (264)
Accrued Postretirement Benefit Liability   $(66,625)    $(66,653)

Weighted-average assumptions as of December 31:

                                            2000          1999
Discount rate                              7.75%          8.0%


For  measurement purposes, a 6.0% annual increase in the per
capita  cost of covered health care benefits was assumed  for
2001,  decreasing by 0.5% per year to the ultimate  rate  of
5.5% in 2002 and after.

Net post retirement cost includes the following:

(Dollars in thousands)
                                            2000      1999      1998
Components of net benefit cost
     Service cost                          $  471    $  548    $  434
     Interest cost                          4,214     4,221     4,121
     Amortization of:
          Prior service credit                (44)      (44)      (44)
          Actuarial gain                     (524)        -      (167)
Total net benefit cost                     $4,117    $4,725    $4,344

Assumed  health  care cost trend rates  have  a  significant
effect  on the amounts reported for the health care plan.  A
one-percentage point change in the assumed health care  cost
trend rates would have the following effects:

                                                        1%        1%
(Dollars in thousands)                              Increase   Decrease
Effect on total of service and interest
     cost components                                 $  169      $(173)
Effect on the postretirement benefit obligation      $2,121    $(2,165)


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 that 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,  totaled
$2,265,000  in  2000, $2,460,000 in 1999, and $2,088,000  in
1998.  In  2000, the Company's match was made  with  390,707
treasury shares.

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 $1,548,000, $2,282,000 and $21,493,000
for  the  years  ended  December 31, 2000,  1999  and  1998,
respectively.


9.   Stock Compensation Plans

The  Company  has various stock incentive plans (the  Plans)
under  which  shares of restricted stock and  stock  options
have  been awarded to regular, full-time employees and  non-
employee directors.

During 2000, the Company granted 15,000 shares of restricted
stock  at  $7.0625 per share; in 1999, 141,000  shares  were
granted  at  $14.0625 per share; and in 1998, 78,874  shares
were  granted  at $12.20. The restricted stock  awards  vest
over  time and are contingent on the Company's average stock
price  achieving  pre-determined increases  over  the  grant
price  for 10 consecutive trading days. All restricted stock
awards  entitle  the participant credit for  any  dividends.
Compensation  expense  is recognized based  upon  the  stock
price when the minimum required stock price is achieved.  As
of  December  31,  2000, there were approximately  1,160,000
shares  for which the stock price had not reached  the  pre-
determined  increases  required  for  vesting.  Compensation
expense  will  be recognized for those shares if  the  stock
price meets the required levels.

The following is a summary of stock option data:

                                                    Wtd. Avg
                                     Number of      Exercise
                                     Options        Price
Outstanding at December 31, 1998           -        $     -
Granted                              916,400          13.83
Exercised                                  -              -
Forfeited                                  -              -
Outstanding at December 31, 1999     916,400        $ 13.83
Granted                            1,328,600           4.81
Exercised                                  -              -
Forfeited                           (198,872)         12.83
Outstanding at December 31, 2000   2,046,128       $   8.07

The following is a summary of stock options outstanding and
exercisable at December 31, 2000:


OUTSTANDING OPTIONS
                                   Wtd.Avg        Wtd. Avg
    Range of        Number of     Remaining       Exercise
Exercise Prices      Options      Life (Years)     Price
$ 4.72-$7.0625      1,302,300        6.3         $ 4.81
$13.00-$14.0625       743,828        3.5         $13.78
                    2,046,128

EXERCISABLE OPTIONS
                                   Wtd. Avg
   Range of         Number of      Exercise
Exercise Prices     Options          Price
$ 4.72-$7.0625      406,950        $ 5.01
$13.00-$14.0625     263,753        $13.86
                    670,703

Stock  options granted in 2000 vest twenty-five  percent  on
each  of  the following dates: July 15, 2000; May 16,  2001;
May  16, 2002; and May 16, 2003 and expire on May 16,  2007.
Stock  options granted in 1999 vest ratably over  48  months
beginning  in January 2000 and expire on May 12,  2004.  The
grant  prices are equal to the closing stock prices  on  the
dates of the grants. No stock options were granted in 1998.

As  of December 31, 2000 there were 216,100 shares remaining
reserved for granting of restricted stock and stock  options
under the Plans.

The  Company  also has a Safety Award Plan  under  which  it
awards  shares  of common stock to designated employees  who
achieve  certain operational safety goals. During the  years
ended  December 31, 2000 and 1999, the Company issued 69,045
and  8,120 treasury shares, respectively. As of December 31,
2000, 72,835 shares remained in this plan.

For  the  years ended December 31, 2000, 1999 and 1998,  the
Company  recognized non-cash charges of $250,000,  $289,000,
and  $14,449,000, respectively, under its stock compensation
plans.

The Company accounts for stock compensation under Accounting
Principles Board Opinion No. 25  Accounting for Stock Issued
to  Employees.    Had the Company applied SFAS  No.  123,  "
Accounting for Stock-Based Compensation,  pro forma net loss
for  the  year  ended  December 31,  2000  would  have  been
$10,127,000 or $0.47 per basic and diluted share.  Pro forma
net  loss  for the year ended December 31, 1999  would  have
been  $683,000  or  $0.03 per basic and diluted  share.  Pro
forma  net income for the year ended December 31, 1998 would
have  been $29.8 million or $1.32 per basic share and  $1.27
per  diluted  share. The weighted average  grant  date  fair
value  of  the  options granted in 2000 and 1999  using  the
Black-Sholes  option pricing model was $2.71 and  $7.84  per
share, respectively.  The following assumptions were used
to  calculate  the  stock option values: risk-free  interest
rate,  6.3%;  expected  life, 5 years; expected  volatility,
60%; and expected dividend yield, 0%.


10.  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.

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

As  of December 31, 2000, the Company has pledged $6 million
of   letters  of  credit  to  CNF  for  uninsured   workers'
compensation and employer' s liability claims incurred prior
to   the   spin-off  and  guaranteed  by  CNF.  The  pledged
collateral  is reduced over time as the Company' s  pending
claims are resolved.


11.  Segment and Geographic Information

The    Company    primarily   provides   less-than-truckload
transportation,  air  freight forwarding  and  supply  chain
management services throughout the United States and Canada,
as   well  as  in  Mexico  through  a  joint  venture,   and
international freight services between the United States and
more than 80 countries. The Company does not present segment
disclosures because the air freight forwarding, supply chain
management  and international freight service  offerings  do
not  meet  the  quantitative  thresholds  of  Statement   of
Financial  Accounting Standards No. 131  "Disclosures  about
Segments  of  an  Enterprise and Related Information."   The
following  information  sets forth  revenues  and  property,
plant  and  equipment by geographic location.  Revenues  are
attributed to geographic location based upon the location of
the  customer. No one customer provides 10% or more of total
revenues.

Geographic Information
(Dollars in thousands)

                                  2000          1999            1998
Revenues
   United States              $2,206,468     $2,248,773      $2,117,415
   Canada                        145,900        130,227         121,008
Total                         $2,352,368     $2,379,000      $2,238,423

Property, Plant and Equipment
   United States              $  312,349     $  332,999      $   332,912
   Canada                         36,445         35,953           27,860
Total                         $  348,794     $  368,952      $   360,772



<TABLE>
<CAPTION>



Management Report on Responsibility for Financial Reporting

The   management  of  Consolidated  Freightways  Corporation   has
prepared  the accompanying financial statements and is responsible
for  their  integrity. The statements were prepared in  accordance
with  accounting  principals  generally  accepted  in  the  United
States,  after giving consideration to materiality, and are  based
on  management's best estimates and judgments. The other financial
information in the annual report is consistent with the  financial
statements.

Management  has  established and maintains a  system  of  internal
control. Limitations exist in any control structure based  on  the
recognition  that the cost of such system should  not  exceed  the
benefits  derived. Management believes its control system provides
reasonable  assurance as to the integrity and reliability  of  the
financial  statements, the protection of assets from  unauthorized
use or disposition, and the prevention and detection of fraudulent
financial  reporting. The system of internal control is documented
by  written  policies  and  procedures that  are  communicated  to
employees. The Company's independent public accountants  test  the
adequacy and effectiveness of the internal controls.

The Board of Directors, through its audit committee consisting  of
three  independent  directors,  is responsible  for  engaging  the
independent accountants and assuring that management fulfills  its
responsibilities  in the preparation of the financial  statements.
The  Company's  financial statements have been audited  by  Arthur
Andersen LLP, independent public accountants. Arthur Andersen  LLP
has  access  to  the  audit  committee  without  the  presence  of
management  to discuss internal accounting controls, auditing  and
financial reporting matters.

/s/Patrick H. Blake
Patrick H. Blake
President and Chief Executive Officer


/s/Robert E. Wrightson
Robert E. Wrightson
Executive Vice President
  and Chief Financial Officer


/s/James R. Tener
James R. Tener
Vice President and
Controller




Report of Independent Public Accountants


To  the  Shareholders  and  Board  of  Directors  of  Consolidated
Freightways Corporation:

We  have  audited the accompanying consolidated balance sheets  of
Consolidated Freightways Corporation (a Delaware corporation)  and
subsidiaries  as  of December 31, 2000 and 1999, and  the  related
statements   of   consolidated   operations,   cash   flows    and
shareholders'  equity for each of the three years  in  the  period
ended  December  31,  2000.  These financial  statements  are  the
responsibility of the Company's management. Our responsibility  is
to  express an opinion on these financial statements based on  our
audits.

We  conducted  our  audits in  accordance  with  auditing
standards generally accepted in the United States. Those standards
require  that  we plan and perform the audit to obtain  reasonable
assurance  about  whether the financial  statements  are  free  of
material  misstatement. An audit includes  examining,  on  a  test
basis,  evidence  supporting the amounts and  disclosures  in  the
financial  statements.  An  audit  also  includes  assessing   the
accounting  principles  used  and significant  estimates  made  by
management, as well as evaluating the overall financial  statement
presentation.  We  believe that our audits  provide  a  reasonable
basis  for  our opinion.

In our opinion, the financial  statements
referred  to  above present fairly, in all material respects,  the
financial  position  of Consolidated Freightways  Corporation  and
subsidiaries as of December 31, 2000 and 1999, and the results  of
their  operations and their cash flows for each of the three years
in   the  period  ended  December  31,  2000  in  conformity  with
accounting principles generally accepted in the United States.


/s/Arthur Andersen LLP
Arthur Andersen LLP
Portland, Oregon
January 25, 2001





                                            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>
2000 - Quarter Ended

     Revenues                                   $593,629          $586,101            $592,902            $579,736
     Operating income (loss)                      (1,239)            2,129               5,594              (8,411)
     Income (loss) before income taxes
       (benefits)                                 (6,079)            1,322               4,565             (10,032)
     Income taxes (benefits)                      (3,100)            1,215               3,244              (4,018)
     Net income (loss)                            (2,979)              107               1,321              (6,014)
     Basic earnings (loss) per share               (0.14)                -                0.06               (0.28)
     Diluted earnings (loss) per share             (0.14)                -                0.06               (0.28)
     Market price range                      $5.31-$8.25       $4.00-$7.00         $4.19-$5.31         $3.25-$5.13


                                                March 31          June 30          September 30         December 31

1999 - Quarter Ended

     Revenues                                   $558,208          $589,781            $625,547            $605,464
     Operating income (loss)                      13,192             4,962               9,723             (20,002)
     Income (loss) before income taxes
       (benefits)                                 12,619             4,686               9,364             (20,641)
     Income taxes (benefits)                       5,868             2,179               4,634              (9,366)
     Net income (loss)                             6,751             2,507               4,730             (11,275)
     Basic earnings (loss) per share                0.30              0.11                0.21               (0.52)
     Diluted earnings (loss) per share              0.30              0.11                0.21               (0.52)
     Market price range                    $11.50-$18.44     $10.25-$15.00        $9.00-$12.50        $6.75-$10.63


</TABLE>


<TABLE>
<CAPTION>

Five Year Financial Summary

Consolidated Freightways Corporation
   And Subsidiaries
Years Ended December 31
(Dollars in thousands except per share data)
(Unaudited)
                                                 2000             1999               1998              1997            1996
<S>                                        <C>             <C>               <C>              <C>             <C>
SUMMARY OF OPERATIONS
Revenues                                    $ 2,352,368     $  2,379,000      $  2,238,423     $  2,299,075    $  2,146,172
Operating income (loss)                          (1,927)           7,875            52,064(a)        45,259(b)      (73,066)(c)
Depreciation and amortization                    59,152           58,363            50,918           54,679          64,565
Investment income                                 1,490            2,688             4,957            1,894             263
Interest expense                                  4,883            4,160             4,012            3,213             843
Income (loss) before income taxes
   (benefits)                                   (10,224)           6,028            51,817           41,982         (77,777)
Income taxes (benefits)                          (2,659)           3,315            25,471           21,623         (22,201)
Net income (loss)                                (7,565)           2,713            26,346           20,359         (55,576)
Cash from operations                             21,133           21,513            73,842           77,370           2,545

PER SHARE
Basic earnings (loss)                             (0.35)            0.12              1.16             0.92           (2.52)
Diluted earnings (loss)                           (0.35)            0.12              1.12             0.89           (2.52)
Shareholders' equity                              11.62            12.16             11.81            10.58            9.57

FINANCIAL POSITION
Cash and cash equivalents                        46,523           49,050           123,081          107,721          48,679
Property, plant and equipment, net              348,794          368,952           360,772          382,987         416,688
Total assets                                    926,682          916,272           890,390          897,796         857,087
Capital expenditures                             42,348           67,273            31,271           22,674          48,203
Long-term debt                                   15,100           15,100            15,100           15,100          15,100
Shareholders' equity                            252,184          258,562           266,718          243,447         210,698

RATIOS AND STATISTICS
Current ratio                                  1.3 to 1         1.2 to 1          1.3 to 1         1.3 to 1        1.1 to 1
Net income (loss) as % of revenues                 (0.3)%            0.1%              1.2%             0.9%           (2.6)%
Effective income tax (benefit) rate               (26.0)%           55.0%             49.2%            51.5%          (28.5)%
Long-term debt as % of
    total capitalization                            5.6%             5.5%              5.4%             5.8%            6.7%
Return on average invested capital                 (1.9)%            3.6%             26.2%            24.9%          (27.8)%
Return on average shareholders' equity             (3.0)%            1.1%             13.9%            12.9%          (21.2)%
Average shares outstanding                   21,492,130       22,349,997        22,634,362       22,066,212      22,025,323
Market price range                          $3.25-$8.25     $6.75-$18.44      $7.50-$19.75     $7.00-$18.50    $6.00-$9.125
Number of shareholders                           32,500           31,800            34,350           31,650          13,500
Number of employees                              21,100           22,100            21,000           21,600          20,300

<FN>
(a)  Includes $14.4 million non-cash charge for the issuance of common stock under the Company's restricted stock plan.
(b)  Includes $14.3 million non-cash charge for the issuance of common stock under the Company's restricted stock plan.
(c)  Includes $15.0 million non-cash charge for the increase in workers' compensation reserve.

</TABLE>



                                                          EXHIBIT 21




                  CONSOLIDATED FREIGHTWAYS CORPORATION
                      SUBSIDIARIES OF THE COMPANY
                           December 31, 2000

 The subsidiaries of the Company were:

                                                         State or
                                             Percent of  Province or
                                             Stock Owned Country of
Subsidiaries                                 by Company  Incorporation

Consolidated Freightways
 Corporation of Delaware                        100      Delaware
   Canadian Freightways, Limited                100      Alberta,Canada
   Milne & Craighead, Inc.                      100      Alberta,Canada
   Canadian Freightways Eastern Limited         100      Ontario,Canada
   United Terminals Ltd.                        100      B.C., Canada
   Blackfoot Logistics Ltd.                     100      B.C., Canada
   Transport CFQI, Inc., d.b.a.
     Epic Express and Universal Contract
     Logistics                                  100      Quebec, Canada
   Click Express Inc.                           100      Alberta,Canada
   Interport Sufferance Warehouses              100      Ontario,Canada
   Panorama Mainland Ltd.                       100      Alberta,Canada
   724567 Alberta Ltd.                          100      Alberta,Canada
   724569 Alberta Ltd. d.b.a. Evergreen
     Logistics                                  100      Alberta,Canada
   Consolidadora De Fletes Mexico S.A. de C.V.   99      Mexico, D.F.
   Transportes CF Dominican Republic             34      Dominican Republic
   Transportes CF Guatemala S.A.                 99.9    Guatemala
   Transportes CF Costa Rica S.A.               100      Costa Rica
Leland James Service Corporation                100      Delaware
Redwood Systems, Inc.                           100      Delaware
   Redwood Systems Logistics de Mexico          100      Mexico -Jalisco
   Redwood Systems Services de Mexico           100      Mexico -Jalisco
CF AirFreight Corporation                       100      Delaware
CF Risk Management Services                     100      Bermuda
Grupo Consolidated Freightways S.A. de C.V.     100      Mexico, D.F.
   CF Alfri-Loder, S. de R.L. de C.V.            50      Mexico - Nuevo Leon
   Transportes CF Alfri-Loder de R.L. De C.V.    49      Mexico - Nuevo Leon
CF MovesU.com Incorporated                      100      Delaware