<PAGE>
                  SECURITIES AND EXCHANGE COMMISSION
                          Washington D. C. 20549

                               Form 10-Q


    X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
       SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY  PERIOD ENDED
       MARCH 29, 1997, OR

       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
       SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
       ___________ TO _______________


Commission File Number 0-19791

                            USFREIGHTWAYS CORPORATION
               (Exact name of registrant as specified in its charter)


Delaware                                             36-3790696
(State of Incorporation)                   (IRS Employer Identification No.)

9700 Higgins Road, Rosemont, Illinois                           60018
(Address of principal executive offices)                     (Zip Code)

                            Registrant's telephone number
                         including area code: (847) 696-0200

                              Not applicable
     (Former name or former address, if changed since the last report)


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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

As of April 16, 1997, 25,797,457 shares of common stock were outstanding.


================================================================================




<PAGE>
                    PART I:  FINANCIAL INFORMATION

Item 1.             Financial Statements.


                  USFreightways Corporation and Subsidiaries
                        Consolidated Balance Sheets
                                (Unaudited)
                             (dollars in thousands)
<TABLE>
<CAPTION>

                                                               March 29,      December 28,
                                                                  1997            1996
---------------------------------------------------------------------------------------------
                    <S>                                          <C>                 <C>
Assets
Current assets:
    Cash                                                       $    3,403     $      4,090
    Accounts receivable, net                                      172,075          157,874
    Other                                                          46,194           41,613
                                                           ----------------------------------
Total current assets                                              221,672          203,577
                                                           ----------------------------------
Net property and equipment                                        400,367          395,500
Net intangible assets                                              78,906           79,559
Other                                                               9,695            9,872
                                                           ----------------------------------
Total assets                                                    $ 710,640     $    688,508
                                                           ----------------------------------


Liabilities and Stockholders' Equity

Current liabilities:
  Current bank debt                                             $   1,250     $        333
  Accounts payable                                                 44,500           41,734
  Other current liabilities                                       124,410          102,281
                                                            ----------------------------------
  Total current liabilities                                       170,160          144,348
                                                            ----------------------------------

Long-term liabilities:
     Long-term bank debt                                               -            78,000
     Notes payable                                                100,000          100,000
     Other long-term liabilities                                   93,011           96,900
                                                            ----------------------------------
Total long-term liabilities                                       193,011          274,900
                                                            ----------------------------------
Common stockholders' equity                                       347,469          269,260
                                                            ----------------------------------
Total liabilities and stockholders' equity                      $ 710,640     $    688,508
                                                            ----------------------------------
</TABLE>

<PAGE>

                    USFreightways Corporation and Subsidiaries
                        Consolidated Statements of Income
                                   (Unaudited)
                (dollars in thousands, except per-share amounts)


<TABLE>
<CAPTION>

                                                                   Three Months Ended
                                                      ----------------------------------
                                                          March 29,             March 30,
                                                            1997                  1996
-----------------------------------------------------------------------------------------
              <S>                                               <C>               <C>                    
Operating Revenue                                       $   355,817            $  313,705
Operating Expenses:
     Salaries, wages and benefits                           226,956               203,484
     Purchased transportation                                12,342                10,982
     Operating expenses and supplies                         47,033                43,492
     Operating taxes and licenses                            14,973                13,940
     Insurance and claims                                     7,069                 5,440
     Communications and utilities                             4,373                 3,691
     Depreciation and equipment leases                       16,693                15,537
     Building and office equipment rents                      4,293                 3,801
     Amortization of intangible assets                          653                   580
     Other operating expenses                                 2,361                 2,346
                                                      -----------------------------------
Total operating expenses                                    336,746               303,293
                                                      -----------------------------------
Operating income                                             19,071                10,412
                                                      -----------------------------------
Non-operating income (expense):
     Interest expense                                        (2,582)               (2,916)
     Interest income                                            164                   174
     Other, net                                                  99                   (40)
                                                      ------------------------------------
Total non-operating expense                                  (2,319)                (2,782)
                                                      ------------------------------------
Income  before income taxes                                  16,752                  7,630
Income tax expense                                            7,002                  3,281
                                                      ------------------------------------
Net Income                                              $     9,750            $     4,349
                                                      ------------------------------------
Average Shares Outstanding                               24,571,349             22,159,747
Earnings per common share:
Net Income                                                     0.40                   0.20
         
                                                      -------------------------------------
</TABLE>
<PAGE>



                                     USFreightways Corporation
                               Consolidated Statements of Cash Flows
                                            (Unaudited)
                                       (dollars in thousands)
<TABLE>
<CAPTION>
  -------------------------------------------------------------------------------------------------

                                                                    Three Months Ended
                     <S>                                         <C>                 <C>
                                                          -----------------     -----------------
                                                             March 29,             March 30,
                                                                1997                  1996
                                                          -----------------     -----------------

  Cash flows from operating activities:

      Net income                                           $     9,750          $         4,349

      Adjustments to net income:
          Depreciation and amortization                         16,784                   15,181
          Other items affecting cash
            from operating activities                            1,799                  (10,848)                                   
                                                          -----------------     -----------------
  Net cash provided by operating activities                     28,333                    8,682
                                                          -----------------     -----------------

  Cash flows from investing activities:
      Capital expenditures, net of proceeds
          on sales                                             (20,694)                 (21,217)
      Acquisition of Transus                                         -                  (27,265)                                  
                                                          -----------------     -----------------
Net cash used in investing activities                          (20,694)                 (48,482)
                                                          -----------------     -----------------

  Cash flows from financing activities:
      Dividends paid                                            (2,108)                  (2,045)
      Proceeds from sale of common stock                        69,760                        -
      Proceeds from sale of treasury stock                       1,105                    1,052
      Proceeds from long-term debt                                 917                   47,000
      Payments on long-term bank debt                          (78,000)                  (5,056)
                                                          -----------------     -----------------

  Net cash provided by (used in) financing activities           (8,326)                  40,951
                                                          -----------------     -----------------
  Net increase (decrease) in cash                                 (687)                   1,151

  Cash at beginning of period                                    4,090                    1,707
                                                          -----------------     -----------------

  Cash at end of period                                    $     3,403          $         2,858
                                                          =================     =================

</TABLE>
The financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with
the instructions to Form 10-Q.  Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  The statements are unaudited but, in the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.  The Company's
results of operations are affected by the seasonal aspects of the regional LTL
trucking business.  Therefore, operating results for the three months ended
March 29, 1997 are not necessarily indicative of the results that may be
expected for the 53 week fiscal year ending January 3, 1998.  For further
information, refer to consolidated financial statements and footnotes thereto
included in the registrant's annual report on Form 10-K for the year ended
December 28, 1996.







<PAGE>
                     Revenue and Operating Ratios
                   Unaudited (dollars in thousands)

                                                    Quarter ended
                                                    March 29, 1997
                                                  and March 30, 1996

                                           ------------------------------------
Company (Region)                               Revenue     Operating Ratio(a)
-------------------------------------------------------------------------------

Holland (Midwest)                       97         163,730             92.4%
                                        96         139,220             92.7
Red Star (Northeast)                    97          46,395             99.8
                                        96          49,084            104.6
Reddaway (West Coast, Northwest)        97          44,986             96.8
                                        96          41,866             97.9
Bestway (Southwest)                     97          30,420             88.4
                                        96          27,525             89.9
Dugan (Plains, South)                   97          40,568             95.8
                                        96          35,285             99.9
Logistics Operations                    97          25,165             94.8
                                        96          18,839             98.1

  (a) Operating ratio is direct operating costs as a
percentage of revenue.


<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.

USFreightways  Corporation ("the Company")  reported net income for the 13 weeks
ended March 29, 1997 of $9,750,000,  a 124.2% increase over the $4,349,000 which
was  reported  for the 13 weeks  which ended  March 30,  1996.  During the first
quarter of the current year, the Company issued an additional  3,105,000  shares
of its common stock through a public offering. Net income per share for the 1997
quarter,  on an average of  24,591,349  shares,  was  equivalent to 40 cents per
share  which is a 100%  increase  compared  to 20 cents per share on  22,159,747
average shares outstanding in the first quarter of 1996.

Revenue  for  the  1997  quarter   increased  by  13.4%  to  $355,817,000   from
$313,705,000  for the same period of the 1996 year. The regional  trucking group
increased  less-than-truckload  (LTL)  revenue  by  11.5%  on an  increased  LTL
shipment count of 7.3% and an LTL tonnage increase of 10.5%.

The logistics group continued its substantial growth rates in the current year's
first  quarter.  Revenue for the thirteen  weeks of the current year amounted to
$25,165,000, an increase of 33.6% and the operating ratio improved to 94.8% from
98.1% compared to 1996.

The Company had a significantly improved first quarter  compared to the same
period of the  previous  year.  All  of  the  operating   units improved
profitability  in the current year's quarter compared to the same period of last
year. Net income for the first quarter of the 1996 year was adversely  affected,
particularly  in Red Star  territory,  because  of heavy  winter  storms  in the
Northeast.  Although the Company  experienced  ice storms in the  Southeast  and
extensive  flooding in the Pacific  Northwest last year, the Company had similar
conditions  in the West this year  impacting  both  Bestway and  Reddaway in the
month of January.

USF Holland  achieved record first quarter  revenue levels,  which resulted in a
revenue  increase  of  17.6%  and a 22.9%  increase  in  operating  income.  The
operating  ratio  improved to 92.4% in the 1997  quarter  compared to 92.7% last
year. USF Bestway continued its outstanding  performance with an operating ratio
of 88.4% in the current year  compared to 89.9% in the previous  year on revenue
growth of 10.5%.  The demise of  Merchants  of Texas  midway  through  the first
quarter further contributed to the revenue increase at USF Bestway. The improved
operating  performance  at both  USF  Dugan  and USF  Reddaway  is  particularly
noteworthy as they have  successfully  integrated  the operations of Transus and
United respectively. USF Reddaway recently signed a four year agreement with the
Teamsters  union  which will  provide  labor  stability  through  the year 2000.
Probably the most  encouraging  turnaround  is at USF Red Star where,  despite a
decline in revenue in the current year's  quarter of 5.5%,  the operating  ratio
was reduced  from 104.6% in the 1996 quarter to 99.8% in the 1997  quarter.  USF
Red Star incurred a small loss in the month of January,  but produced  operating
profits both for the months of February  and March,  primarily as a result of an
increase in revenue per LTL  shipment  to $98.98 in the current  year's  quarter
from $92.29 last year.
 <PAGE>
Each subsidiary has improved its operating income in  the  current  year's
quarter.  Although  the  Company  is  still  in a very competitive  business,
price increases which became effective  January 2nd have been  reasonably well
accepted by the Company's  customers and as a result,  LTL revenue per  shipment
increased  to $101.99  from  $98.17 in the 1996  quarter, equivalent  to  3.9%.
While  the  Company  is  encouraged  with  the  excellent improvement  in its
operating  results,  it continues to review and monitor its costs on a recurring
basis. Assuming no decline in the current level of economic activity and no
significant  increase in interest rates,  which could negatively impact economic
growth,  the Company believes it will continue to be one of the leaders in the
regional LTL market.

The  successful  completion of the public  offering of an  additional  3,105,000
shares of the Company's common stock,  which was concluded on February 10, 1997,
generated  approximately  $69,000,000,  net  of  expenses  in new  equity.  This
additional capital significantly improves the Company's balance sheet as well as
its leverage capabilities. While proceeds were used to reduce long term debt, it
is the Company's  intention to use now available credit  facilities to: increase
terminal capacity at USF Holland; continue to make additional investments in our
fast growing logistics business;  and, to make appropriate  acquisitions,  which
will increase density in our regional LTL subsidiaries,  particularly at USF Red
Star.

Capital  expenditures  for the current year's quarter  amounted to approximately
$21 million of which $17 million  was for revenue  equipment  and $1 million for
terminal  facilities.  Last year,  for the same  quarter,  capital  expenditures
approximated  $49 million,  but that included $27 million for the acquisition of
the Transus general commodities business.

A dividend of 9 1/3 cents per share was paid on April 4, 1997 to shareholders of
record on March 21, 1997.




<PAGE>

                    PART II: OTHER INFORMATION

Item 1.        Legal Proceedings.

               Other than the  Whitworth  matter  which was  reported  on by the
               Company in an 8-K filed on January 7, 1997,  there are no pending
               material  legal  proceedings,   other  than  ordinary  litigation
               incident to the Company's  business  which the Company is a party
               to  or  which  any  of  its  property  is  subject.  No  material
               litigation or  governmental  proceeding was instituted or pending
               against the Company  arising  from any alleged  violation  of the
               Comprehensive Environmental Response,  Compensation and Liability
               Act (CERCLA) or other environmental regulations.

Item 6.        Exhibits and Reports on Form 8-K.

               (a)  Exhibits
               (b)  Current Reports on Form 8-K were filed:
                    1.   On January 7, 1997 reporting a subsequent litigation
                         matter for the fourth quarter 1996.




                         SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized. Dated the 6th day of May, 1997.


                                   USFREIGHTWAYS CORPORATION

                                   By: /s/ Christopher L. Ellis
                                           --------------------
                                           Christopher L. Ellis
                                           Senior Vice President, Finance and
                                           Chief Financial Officer

                                   By: /s/ Robert S. Owen
                                           --------------
                                           Robert S. Owen
                                           Controller and Principal
                                           Accounting Officer