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 OCTOBER 2, 1999, 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 October 26, 1999, 26,481,431 shares of common stock were outstanding.




<PAGE>





                             PART I: FINANCIAL INFORMATION



Item 1.                           Financial Statements.

                                USFreightways Corporation
                             Condensed Consolidated Balance Sheets
                                Unaudited (Dollars in thousands)
<TABLE>
<CAPTION>
                                                            October 2,          December 31,
                                                                 1999                  1998
-----------------------------------------------------------------------------------------------------
          <S>                                                    <C>                     <C>
Assets
Current assets:
     Cash and deposits                                  $        6,283        $          5,548
     Accounts receivable, net                                  284,654                 218,942
     Other                                                      61,581                  55,359
                                                     -----------------     -------------------
          Total current assets                                 352,518                 279,849
                                                     -----------------     -------------------

Net property and equipment                                     622,043                 544,282
Net intangible assets                                          173,883                 140,201
Other assets                                                    12,591                  10,341
                                                     -----------------     -------------------
Total assets                                            $    1,161,035        $        974,673
                                                     -----------------     -------------------

Liabilities and Stockholders' Equity
Current liabilities:
     Current bank debt                                  $       16,240        $         10,660
     Notes payable                                             100,000                    -
     Accounts payable                                           83,043                  78,757
     Other current liabilities                                 188,337                 139,460
                                                     -----------------      ------------------
     Total current liabilities                                 387,620                 228,877
                                                     -----------------      ------------------
Long-term liabilities:
     Long-term bank debt                                         3,394                  51,096
     Notes payable                                             100,000                 100,000
     Other long-term liabilities                               140,159                 135,566
                                                      -----------------     ------------------
            Total long-term liabilities                        243,553                 286,662
                                                      -----------------     ------------------
Common stockholders' equity                                    529,862                 459,134
                                                      -----------------     ------------------
Total liabilities and stockholders' equity              $    1,161,035        $        974,673
                                                      -----------------     ------------------


</TABLE>
<PAGE>






                              USFreightways Corporation
                         Consolidated Statements of Income
             Unaudited (Dollars in thousands, except per-share amounts)
<TABLE>
<CAPTION>
                                                  Three months ended                      Nine months ended
                                        -------------------------------------        ----------------------------
                                             October 2,            October 3,     October 2,            October 3,
                                                  1999                  1998           1999                  1998
-----------------------------------------------------------------------------        -----------------------------
     <S>                                          <C>                 <C>             <C>                     <C>
Operating revenue
     LTL Trucking                         $    448,710       $       396,918    $  1,296,228       $     1,158,782
     TL Trucking                                12,338                 3,468          33,203                 3,468
     Logistics                                  53,410                33,122         143,127                92,696
     Freight Forwarding                         57,488                35,841         161,473               103,768
                                     -----------------      ----------------    ------------          ------------
Total operating revenue                   $    571,946      $        469,349    $  1,634,031       $     1,358,714

Operating expenses:
     LTL Trucking                              401,249               361,901       1,174,686             1,065,337
     TL Trucking                                11,267                 3,110          30,576                 3,110
     Logistics                                  48,605                31,077         131,081                86,846
     Freight Forwarding                         55,177                34,634         156,175               101,077
     Corporate and other                         2,344                 3,776           8,191                 9,322
                                     -----------------       ----------------   ------------          ------------
Total operating expenses                       518,642               434,498       1,500,709             1,265,692
                                     -----------------       ----------------   ------------          ------------
Income from operations                          53,304                34,851         133,322                93,022
                                     -----------------       ----------------   ------------          ------------
Non-operating income (expense):
     Interest expense                           (3,706)               (2,109)        (10,001)               (6,243)
     Interest income                               372                   191             965                   634
     Other, net                                      -                   125            (341)                 (102)
                                      ----------------        ---------------   ------------           -----------
Total non-operating expense                     (3,334)               (1,793)         (9,377)               (5,711)
                                      ----------------        ---------------   ------------           -----------
Net income before income taxes                  49,970                33,058         123,945                87,311
Income tax expense                              20,247                13,554          50,443                36,034
                                      -----------------       ---------------   ------------           -----------
Net income                               $      29,723       $        19,504    $     73,502        $       51,277
                                      -----------------       ---------------   ------------           -----------

Average shares outstanding - basic          26,462,497            26,244,706      26,393,085            26,187,788
Average shares outstanding - diluted        27,810,822            26,413,506      27,397,204            26,467,601
Basic earnings per common share:         $        1.12       $          0.74    $       2.78         $        1.96
Diluted earnings per common share:       $        1.07       $          0.74    $       2.68         $        1.94
                                      -----------------     ------------------  ------------           -----------
</TABLE>









<PAGE>


                                 USFreightways Corporation
                         Condensed Consolidated Statements of Cash Flows
                                Unaudited (Dollars in thousands)
<TABLE>
<CAPTION>
                                                                Nine months ended
                                                          ----------------------------
                                                     October 2,            October 3,
                                                          1999                  1998
--------------------------------------------------------------------------------------
               <S>                                        <C>                 <C>
Cash flows from operating activities:

Net Income                                      $         73,502       $       51,277
Adjustments to net income:
    Depreciation and amortization                         70,161               59,846
    Other items affecting cash                           (10,856)               4,258
      from operating activities
                                                  --------------        -------------
Net cash provided by operating activities                132,807              115,381
                                                  --------------        -------------
Cash flows from investing activities:
  Capital expenditures                                  (140,134)            (119,715)
  Proceeds on sales                                        3,864                5,424
  Acquisitions                                           (49,377)              (7,625)
                                                  --------------        -------------
Net cash used in investing activities                   (185,647)            (121,916)
                                                  --------------        -------------
Cash flows from financing activities:
  Dividends paid                                          (7,378)              (7,321)
  Proceeds from sale of Notes                             98,452                  -
  Proceeds from sale of treasury stock                     4,623                4,662
  Proceeds from long-term bank debt                       30,206               20,000
  Payments on long-term bank debt                        (77,908)             (14,274)
  Net change in short-term bank debt                       5,580                4,569
                                                  --------------        -------------
Net cash provided by (used in) financing activities       53,575                7,636
                                                  --------------        -------------
Net increase/(decrease) in cash and deposits                 735                1,101
                                                  --------------        -------------
Cash and deposits at beginning of period                   5,548                6,471
                                                  --------------        -------------
Cash and deposits at end of period             $           6,283        $       7,572
                                                  --------------        -------------


</TABLE>




<PAGE>

              Notes to Condensed Consolidated Financial Statements
                  (Dollars in thousands, except per share amounts)
                                (Unaudited)

1. General

     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
October  2,  1999 are not  necessarily  indicative  of the  results  that may be
expected for the year ending December 31, 1999. 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 31, 1998.

2. Earnings per share

     Basic  earnings  per share are  calculated  on income  available  to common
stockholders divided by the weighted-average number of common shares outstanding
during the period.  Diluted  earnings per share are  calculated  using  earnings
available  to each share of common  stock  outstanding  during the period and to
each share that would have been  outstanding  assuming  the  issuance  of common
shares for all dilutive potential common shares outstanding during the reporting
period.  Unexercised stock options,  calculated under the treasury stock method,
is the only  reconciling  item between the Company's basic and diluted  weighted
earnings per share. The number of options  included in the denominator,  used to
calculate  diluted  earnings per share are  1,348,325  and 168,800 for the third
quarters of 1999 and 1998  respectively  and  1,004,119  and 279,813 for year to
date 1999 and 1998 respectively.

3. Acquisitions

   On March  2nd,  USF  Logisitics,  the  Company's  logistics  business  unit
acquired  (for cash) all of the  ownership  interests  of  Processors  Unlimited
Company,  Ltd.  (Processors)  a provider  of reverse  logistics  services to the
grocery and drug industries.  Processors has annualized revenue of approximately
$46 million and employs over 1,000 individuals at 48 locations throughout Canada
and the United States.

     On April 12th,  USF Red Star,  one of the  Company's  regional LTL trucking
companies,  completed an asset purchase transaction (for cash)with CBL Trucking,
a Mid-Atlantic and New England LTL  Carrier.

     During the nine months,  USF Worldwide,  the Company's  freight  forwarding
business unit, acquired (for cash) the businesses of Scan Trans, Inc.(its former
agent in San  Francisco,  CA),  Pace  Transportation,  Ltd. (its former agent in
Baltimore,  MD), and Airgo Freight,  Inc. (its former agent in Seattle, WA). USF
Worldwide  acquired  (for  cash) Best Ways Air Cargo  Inc.  (a Puerto  Rican air
freight  forwarder).  USF  Worldwide  also  acquired  (for  cash) the  assets of
CaroTrans'  Puerto Rican NVOCC business unit (a provider of  less-than-container
load and full container load ocean services) and Gulf  International  Freight (a
Houston based air freight forwarder).

     On  August  2, Glen  Moore  Transport,  the  Company's  truckload  carrier,
acquired (for cash) Underwood Trucking, Inc. an Indiana based truckload carrier.
Underwood provides truckload services primarily in the central states.

     On July 31,  USF  Distribution  Services,  a  logistics  subsidiary  of the
Company,  acquired (for cash) Special Dispactch of Dallas, Inc. Special Dispatch
offers overnight  distribution and  consolidation  services to north central and
western Texas.


4. Long-Term Debt

     On May 5, 1999,  the  Company  completed  a $100  million  Guaranteed  Note
offering due May 1, 2009. The  Guaranteed  Notes bear interest at 6 1/2% payable
semi-annually  on May 1 and November 1. The  Guaranteed  Notes are unsecured and
rank equally with all of the Company's other unsecured senior indebtedness.

     The proceeds (after deducting the  underwriting  discount) from the sale of
the Guaranteed Notes was approximately $98.5 million.  The proceeds were used to
reduce the unsecured lines of credit with the Company's various banks. Until the
net proceeds were applied for specific purposes,  the Company was investing them
in marketable securities.
<PAGE>

4. Long-Term Debt (continued)

     The Guaranteed Notes are fully and unconditionally  guaranteed,  on a joint
and several basis, on an unsecured  senior basis, by all of the Company's direct
and indirect domestic subsidiaries (the "Subsidiary Guarantors"). The Company is
a holding  company  and  during the period  presented  substantially  all of the
assets were the stock of the Subsidiary Guarantors, and substantially all of the
operations  were  conducted  by  the  Subsidiary  Guarantors.  Accordingly,  the
aggregate assets, liabilities,  earnings and equity of the Subsidiary Guarantors
were substantially equivalent to the assets, liabilities, earnings and equity of
the Company on a  consolidated  basis.  Management of the Company  believes that
separate  financial  statements of, and other  disclosures  with respect to, the
Subsidiary Guarantors are not meaningful or material to investors.


5.  Subsequent events

     On October 18, the Company announced the start up of USF eLogistics,  a new
business unit capable of fulfilling  the logistics  needs of the growing  online
business to consumer marketplace.

     On October 18, the Company's freight forwarding subsidiary,  USF Worldwide,
announced that as a result of GeoLogistics, a domestic and international freight
forwarder  competitor,  exiting the domestic  market USF Worldwide  hired former
GeoLogistics professionals and opened a new office in Tulsa OK and increased the
capacity of operations in Kansas City, MO, Milwaukee, WI, Indianapolis,  IN Salt
Lake City, UT, Minneapolis, MN and Baltimore, MD.


     On October 20, the Company's freight forwarding  subsidiary, USF Worldwide,
announced the formation of USF Asia Group,  a joint venture with Asia  Challenge
Ltd.  Peter T. C.  Chow,  a  shareholder  of Asia  Challenge  Ltd.,  will be the
President  and CEO of USF Asia Group.  USF Asia Group is  headquartered  in Hong
Kong  and has four  other  locations  in  Asia.  USF  Asia  Group  will  provide
transportation solutions for the Asian market.

<TABLE>
<CAPTION>

6.  Segment Reporting                                   Three Months Ended                  Nine Months Ended
                                                  October 2,       October 3,           October 2,      October 3,
                                                       1999             1998                 1999            1998
-------------------------------------------------------------------------------      ----------------------------
          <S>                                          <C>            <C>                  <C>                <C>
Revenue
   LTL Group:
      USF Holland                             $     231,620    $     202,259         $     678,400    $     595,906
      USF Reddaway                                   63,768           57,147               180,039          161,851
      USF Red Star                                   66,610           55,264               182,245          159,528
      USF Dugan                                      49,035           47,032               145,738          138,029
      USF Bestway                                    37,677           35,216               109,806          103,468
-------------------------------------------------------------------------------      ------------------------------
         Sub total LTL Group                        448,710          396,918             1,296,228        1,158,782
   Truckload - Glen Moore                            12,338            3,468                33,203            3,468
   Logistics subsidiaries                            53,410           33,122               143,127           92,696
   Freight forwarding                                57,488           35,841               161,473          103,768
   Corporate and other                                 -                 -                     -               -
-------------------------------------------------------------------------------      ------------------------------
Total Revenue                                  $    571,946    $     469,349         $   1,634,031    $   1,358,714

Income From Operations
   LTL Group:
      USF Holland                              $     29,792    $      21,972         $      78,400    $      59,301
      USF Reddaway                                    8,268            6,042                19,047           14,047
      USF Red Star                                    2,781            1,199                 4,991            2,498
      USF Dugan                                       2,338            1,906                 6,339            5,434
      USF Bestway                                     4,282            3,898                12,765           12,165
-------------------------------------------------------------------------------      ------------------------------
         Sub total LTL Group                         47,461           35,017               121,542           93,445
   Truckload - Glen Moore                             1,071              358                 2,627              358
   Logistics subsidiaries                             4,805            2,045                12,046            5,850
   Freight forwarding                                 2,311            1,207                 5,298            2,691
   Corporate and other                                 (620)          (2,712)               (3,441)          (6,243)
   Amortization of intangibles                       (1,724)          (1,064)               (4,750)          (3,079)
-------------------------------------------------------------------------------      ------------------------------
Total Income from Operations                    $    53,304     $     34,851         $     133,322     $     93,022
-------------------------------------------------------------------------------      ------------------------------
</TABLE>











<PAGE>



Item 2. Management's Discussion and Analysis of Financial Conditions and
                  Results of Operations.

                          Results of Operations

     USFreightways  Corporation  ("the  Company")  reported  net  income for the
thirteen  weeks ended October 2, 1999 of $29.7 million, a 52%  increase over the
$19.5 million  which was reported for the thirteen  weeks which ended October 3,
1998.  There were 63 working days in the current year's quarter  (excluding July
4th and Labor Day)  compared  to 64 for the same  quarter  of last  year,  which
included only the Labor Day holiday.

     Net income per share for the current year's quarter was equivalent to $1.07
diluted  earnings  per share,  a 45% increase  compared to the 74 cents  diluted
earnings per share for the same quarter of 1998.

     Revenue for the 1999  quarter increased  by 21.9%  to  $571.9 million  from
$469.3 million for the third quarter of 1998.  Golden Eagle and Processors which
were  acquired  since  the  third  quarter  of  1998,   contributed  revenue  of
$28.4 million in the current year's quarter.

     Less-than-truckload  (LTL) revenue for the current  quarter at the regional
trucking subsidiaries, on equivalent working days, increased 14.6% over the 1998
second quarter,  LTL shipments  increased 10.8% and LTL tonnage increased 11.5%.
LTL revenue per  shipment  increased  from $105.86 to $109.47 and the weight per
shipment  increased from 1,137.0 pounds to 1,143.9 pounds. In late July, Preston
Trucking ceased  operations.  The Company estimates that its USF Holland and USF
Red Star subsidiaries  obtained  approximately $10 million in revenue during the
quarter as a result of this closure.  Year to date revenue increased by 12.0% to
$1,189.3 million from $1,061.9 million last year.

     Operating  income in the current  year's  quarter,  for  regional  trucking
increased  35.5% to $47.5 million  compared to $35.0 million for the same period
of 1998. Each of the regional subsidiaries operating ratios improved. Led by USF
Holland,  USF Bestway and USF Reddaway,  the  operating  ratio for the LTL group
improved to 89.4 from 91.2 last year,  the second time in the Company's  history
the regional  trucking group has operated below a 90.0 operating  ratio during a
quarter.  Improvements  in the  quarter's  costs  occurred  in  labor,  workers'
compensation, terminal rents and other operating expenses. While fuel prices are
up over the same  quarter  last  year,  the  regional  trucking  companies  have
implemented  fuel surcharges  that have offset these higher costs.  Year to date
operating  income  increased by 30.1% to $121.5  million from $93.4 million last
year.

     Glen Moore Trucking,  the Company's  truckload carrier that was acquired on
August 31, 1998,  contributed  revenue of $12.3 million and operated at 91.3 for
the current  quarter  compared to revenue of $3.5 million and an operating ratio
of 89.7 in last  year's  quarter.  Higher  labor and fuel  costs in the  current
quarter, compared to last year's quarter,  contributed  to the higher  operating
ratio.

     Revenue in the logistics  group  increased by 61.2% to $53.4 million in the
current  quarter from $33.1 million in the prior year.  Processors,  acquired on
March 2,  contributed  revenue of $11.8 million while other existing  logistics'
contracts  increased revenue by $3.8 million over the prior year's quarter.  USF
Distribution Services increased revenue by $4.6 million of which its Moore & Son
acquisition  (Oct.  15, 1998)  contributed  $1.6 million,  the new Dallas center
contributed $1.3 million while other  distribution  centers increased revenue by
$1.7  million.  Year to date revenue  for the logistics group increased by 54.4%
to $143.1  million from $92.7 million last year.

     Earnings  in the  logistics  group  increased  135% over the  prior  year's
quarter to $4.8 million from $2.0 million due to earnings from Processors, Moore
& Son,  Special Dispatch and higher profits from existing  customers'  business.
Year to date  earnings  increased  by 105.9% to $12.0  million from $5.8 million
last year.
<PAGE>



     Revenue in the Freight  Forwarding  group  increased 60.4% to $57.5 million
from  $35.8  million  in the prior  year's  quarter  due in large  part to $16.5
million in revenue  contributed from the group's recent Golden Eagle acquisition
(Nov. 12, 1998).  Year to date revenue increased by 55.6% to $161.5 million from
$103.8 million last year. The group's profits  improved by 91.5% to $2.3 million
from $1.2 million the prior  year's  quarter.  Year to date profits  improved by
96.9% to $5.3 million from $2.7 million last year.

     During the third quarter,  USF Worldwide,  the Company's freight forwarding
business  unit,  acquired  (for cash)  Best Ways Air  Cargo,  the assets of Gulf
International   Freight  and  the  assets  of  Caro-Trans'  NVOCC  Puerto  Rican
unit.These acquisitions contributed approximately $1.9 million in revenue during
the quarter.

     On  August  2, Glen  Moore  Transport,  the  Company's  truckload  carrier,
acquired (for cash) Underwood Trucking,  Inc. an Indiana based truckoad carrier.
Underwood  provides  truckload  services  primarily  in the  central  states and
contributed approximately $0.8 million in revenue during the quarter.

     On July 31, USF Distribution Services acquired (for cash) Special Dispactch
of Dallas, Inc. Special Dispatch offers overnight distribution and consolidation
services to north  central  and  western  Texas.  Special  Dispatch  contributed
approximately $1.3 million in revenue during the quarter.

                    Liquidity and Capital Resources

     Cash flows from operating  activities contributed $132.8 million during the
nine months compared to $115.4 million during the same period last year.

     Net capital expenditures for the 1999 nine months amounted to approximately
$186 million  including $84.8 million for revenue  equipment,  $36.8 million for
terminal facilities,  $49.4 million for the acquisitions of Processors, CBL, six
freight forwarding companies, one truckload company, one distribution center and
the balance for other capital items. Last year for the same period,  net capital
expenditures  amounted to approximately $121.9 million,  including $67.3 million
for revenue equipment, $36.6 million for terminal facilities and the balance for
other capital items and two acquisitions - a truckload  carrier (Glen Moore) and
a small LTL acquisition in the Northeast - Vallerie's  Transportation  Services,
Inc.

     On May 5, 1999, the Company completed a $100 million offering of Guaranteed
Notes due May 1,  2009 with a coupon  rate of 6.50% and at a spread of 140 basis
points above the 10-year Treasury notes.

     Net  proceeds  from the sale  were used to reduce  the  unsecured  lines of
credit that the Company had with various banks. Until any remaining net proceeds
were applied for specific  purposes,  the Company  invested  them in  marketable
securities.  At October 2, 1999,  the  Company had  applied  all  remaining  net
proceeds and had no deposits in marketable securities.

     A dividend of 9 1/3 cents per share  equivalent to $2.5 million was paid on
October 8, 1999 to shareholders of record on September 24, 1999.

                                 Market Risk

     The  Company  is  exposed  to the  impact of  interest  rate  changes.  The
Company's exposure to changes in interest rates is limited to borrowings under a
line of credit  agreement  which has variable  interest  rates tied to the LIBOR
rate. The weighted average annual interest rates on borrowings under this credit
agreement were approximately 5.3% in the first nine months of 1999. In addition,
the  Company  has $100  million of  unsecured  notes with a 6 5/8% fixed  annual
interest  rate and $100  million of  unsecured  notes with a 6 1/2% fixed annual
interest rate at October 2, 1999. The Company  estimates that the carrying value
of the notes  approximated  its market value at October 2, 1999. The Company has
no hedging  instruments.  From time to time, the Company  invests excess cash in
overnight money market accounts.
<PAGE>



                                   Year 2000

     The  Company has been and  continues  to address  the  universal  situation
commonly  referred  to as the "Year 2000  Problem".  The "Year 2000  Problem" is
related to the  inability  of certain  computer  systems,  software and embedded
technologies  to  properly  recognize  and  process   date-related   information
surrounding the Year 2000.

     In 1996, the Company  initiated a comprehensive  review of its computerized
Information  Technology (IT) and non-information  technology systems to identify
systems that could be affected by the Year 2000  problems and has  implemented a
plan to resolve the  identified  issues.  The Year 2000 issues were  analyzed by
identifying and assessing all systems,  software and embedded  technologies  and
business  partners,  with internal  business  critical  systems,  given a higher
priority.  The Company defines a system as business  critical if a failure would
cause a significant  service disruption or could cause a material adverse effect
on the Company's  operations or financial  results.  As of October 2, 1999,  the
Company has completed  remediation and testing of its business  critical systems
and believes its own computerized  information  technology systems are ready for
the Year 2000. The business  critical  systems have been unit tested by IT staff
members  and many have been  evaluated  using a  detailed  Year 2000 test  plan.
Further  testing and  verification  on the systems will continue  throughout the
remainder of 1999. The Company has  established an internal Year 2000 audit team
to audit the  process  and  results of the Year 2000  efforts  of the  Company's
subsidiaries.  The Company has expended approximately $1.6 million as of October
2,  1999 to ensure  Year 2000  compliance.  The total  cost to ensure  Year 2000
compliance  is estimated to be  approximately  $2 million.  The cost estimate is
based on the Company's  structure and those  subsidiaries it owns at the present
time.  The  acquisition  of any additional  operating  entity may  significantly
impact the total cost as it has been estimated.

     The  Company  has  been  contacting   business  partners  whose  Year  2000
non-compliance could adversely affect the Company's  operations,  employees,  or
customers. As a provider of transportation and logistics services, the Company's
operations are dependent on  telecommunication,  financial and utility  services
provided  by a number  of  entities.  The  Company  is  unaware  of any of these
entities or of any significant supplier not being Year 2000 compliant.  In spite
of this,  the Company  believes the most likely worst case scenario would be the
failure of a material  business  partner to be Year 2000 compliant.  Contingency
plans have been formulated to allow the Company to continue to operate  smoothly
in the event of this occurrence.  Certain  contingency  plans, if required to be
brought into effect,  may result in additional  labor costs to be incurred which
might have an impact on the Company's operating costs.

     The Company's assessment of its Year 2000 issues involves some assumptions.
These assumptions  revolved primarily around the Year 2000  representation  from
third parties with which the Company has business  relationships,  and where the
Company has not been able to independently verify these representations.




                           Forward Looking Statement

This release contains forward-looking statements,  which are subject to certain
risks, and uncertainties  that could cause actual results to differ  materially.
These risks and uncertainties are detailed from time to time in reports filed by
the Company with the Securities and Exchange Commission  including forms 8K, 10Q
and 10K.


<PAGE>

                           PART II: OTHER INFORMATION


Item 1.           Legal Proceedings.

          The Company is a party to a number of  proceedings  brought  under the
          Comprehensive Environmental Response,  Compensation and Liability Act,
          ("CERCLA").  The Company has been made a party to these proceedings as
          an alleged  generator of waste disposed of at hazardous waste disposal
          sites.  In each case,  the  Government  alleges  that the  parties are
          jointly and severally liable for the cleanup costs. Although joint and
          several  liability  is  alleged,   these  proceedings  are  frequently
          resolved on the basis of the quantity of waste disposed of at the site
          by the generator.  The Company's  potential  liability  varies greatly
          from  site to site.  For some  sites  the  potential  liability  is de
          minimis  and for  others  the  costs  of  cleanup  have  not yet  been
          determined.  While it is not  feasible  to  predict or  determine  the
          outcome of these proceedings or similar  proceedings  brought by state
          agencies  or private  litigants,  in the  opinion of  management,  the
          ultimate   recovery  or  liability,   if  any,   resulting  from  such
          litigation,  individually  or in the  aggregate,  will not  materially
          adversely  affect  the  Company's  financial  condition  or results of
          operations  and, to the Company's best knowledge,  such liability,  if
          any, will represent less than 1% of its revenues.

          Steven Mark Whitworth v. TNT Bestway Transportation,  Inc. f/k/a .TNT
          Bestway Inc. and William  Orr,  Case No.  96-3935-A,  14th  Judicial
          District Court,  Dallas County,  Texas.

          On April  19,  1996,  Steven  Mark  Whitworth  ("Plaintiff")  a former
          employee of USF  Bestway  Inc.,  a  subsidiary  of the  Company  ("USF
          Bestway"),  brought suit against USF Bestway and one of its employees,
          alleging  claims  of  fraud  and  promissory   estoppel  arising  from
          Plaintiff's  previous employment as a driver with USF Bestway.   On or
          about October 2, 1996,  Plaintiff amended  his  petition  and added
          claims of  wrongful discharge  and conspiracy to wrongfully discharge.

          On October 7, 1996,  Plaintiff  moved for summary  judgment,  claiming
          that he was entitled to a judgment of $3,500,000 in actual damages and
          $1,750,000  in attorney  fees based on (i) the USF  Bestway's  alleged
          untimely responses to Plaintiff's requests for admissions and (ii) the
          USF Bestway's alleged failure to comply with the requirements of Texas
          law  concerning  the  signature of pleadings by counsel in  connection
          with the responses to Plaintiff's requests for admissions. Following a
          hearing on  November  1, 1996,  the trial  court  granted  Plaintiff's
          motion for summary judgment and entered judgment in favor of Plaintiff
          and  against USF  Bestway,  for  $3,500,000  in  actual  damages
          $1,750,000 in attorneys' fees together with court costs and interest.

          On November 27, 1996,  USF Bestway  moved for  reconsideration  of the
          judgment  and for a new trial.  At a January  7, 1997  hearing on this
          motion, the trial court denied the motion for  reconsideration and for
          new trial,  but ruled that the responses to the  Plaintiff's  requests
          for admissions  were timely.  USF Bestway has posted a superedeas bond
          to prevent  enforcement  of the judgment  pending appeal and perfected
          its appeal to the  Dallas  Court of  Appeals, Fifth District, Texas.

          On June 10, 1999, the Court of Appeals, Fifth District Texas, issued
          an opinion reversing the trial court's grant of summary judgment in
          favor of the plaintiff, and remanding the case back to the trial court
          for a new trial on the merits.

          Also,  the  Company is  involved  in other  litigation  arising in the
          ordinary  course of business,  primarily  involving  claims for bodily
          injuries  and  property  damage.  In the  opinion of  management,  the
          ultimate   recovery  or  liability,   if  any,   resulting  from  such
          litigation,  individually  or in the  aggregate,  will not  materially
          adversely  affect  the  Company's  financial  condition  or results of
          operations.



<PAGE>

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

            (a)      Exhibits

                    1.       Exhibit 27-Financial Data Schedule.

            (b)     Current Reports on Form 8-K were filed:
                    1.       No current reports on Form 8-K were filed during
                             quarter.
















                                   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 27th day of
October, 1999.



                            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