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
  SEPTEMBER 27, 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


   (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 November 5, 1997, 26,055,339 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>

                                                               September 27,           December 28,
                                                                   1997                   1996
-----------------------------------------------------------------------------------------------
             <S>                                                 <C>                      <C>
Assets
Current assets:
     Cash                                                  $     28,704          $       4,090
     Accounts receivable, net                                   189,804                157,874
     Other                                                       40,950                 41,613
                                                       -----------------    -------------------
          Total current assets                                  259,458                203,577
                                                       -----------------    -------------------

Net property and equipment                                      425,443                395,500
Net intangible assets                                            78,429                 79,559
Other assets                                                      9,780                  9,872
                                                       -----------------    -------------------
Total assets                                               $    773,110            $   688,508
                                                       -----------------    -------------------

Liabilities and Stockholders' Equity
Current liabilities:
     Current bank debt                                     $        110            $       333
     Accounts payable                                            55,465                 41,734
     Other current liabilities                                  137,986                102,281
                                                       -----------------    -------------------
          Total current liabilities                             193,561                144,348
                                                       -----------------    -------------------
Long-term liabilities:
     Long-term bank debt                                            -0-                 78,000
     Notes payable                                              100,000                100,000
     Other long-term liabilities                                100,347                 96,900
                                                       -----------------    -------------------
          Total long-term liabilities                           200,347                274,900
                                                       -----------------    -------------------
Common stockholders' equity                                     379,202                269,260
                                                       -----------------    -------------------
Total liabilities and stockholders' equity                 $    773,110            $   688,508
                                                       -----------------    -------------------

</TABLE>
<PAGE>




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

<TABLE>
<CAPTION>
                                                       Three months ended                           Nine months ended
                                           -------------------------------------   -----------------------------------------
                                                September 27,       September 28,       September 27,          September 28,
                                                    1997                1996                 1997                  1996
--------------------------------------------------------------------------------   -----------------------------------------
      <S>                                            <C>                 <C>                   <C>                   <C>
Operating revenue                           $     393,462       $      343,203      $     1,130,042      $         988,997
Operating expenses:
     Salaries, wages and benefits                 246,288              216,932              713,358                630,513
     Purchased transportation                      14,548               12,234               40,392                 35,863
     Operating expenses and supplies               48,404               44,434              143,219                133,592
     Operating taxes and licenses                  15,342               14,025               45,501                 41,932
     Insurance and claims                           7,357                5,573               22,307                 17,010
     Communications and utilities                   4,256                3,790               13,028                 11,475
     Depreciation and equipment leases             17,432               16,777               51,401                 48,099
     Building and office equipment rents            4,460                4,046               13,120                 11,554
     Amortization of intangible assets                660                  644                1,971                  1,821
     Other operating expenses                       2,810                2,220                7,854                  6,967
                                           -----------------   -----------------   -------------------  --------------------
         Total operating expenses                 361,557              320,675            1,052,151                938,826
                                           -----------------   -----------------   -------------------  --------------------
Income from operations                             31,905               22,528               77,891                 50,171
                                           -----------------   -----------------   -------------------  --------------------
Non-operating income (expense):
     Interest expense                              (1,956)              (3,322)              (6,554)                (9,072)
     Interest income                                  380                  155                  770                    488
     Other, net                                       (85)                (196)                 (40)                  (516)
                                           -----------------   -----------------   -------------------  --------------------
          Total non-operating expense              (1,661)              (3,363)              (5,824)                (9,100)
                                           -----------------   -----------------   -------------------  --------------------
Income from operations
  before income taxes                              30,244               19,165               72,067                 41,071
Income tax expense                                 12,702                8,141               30,234                 17,561
                                           -----------------   -----------------   -------------------  --------------------
Net income                                  $      17,542       $       11,024       $       41,833      $          23,510
                                           -----------------   -----------------   -------------------  --------------------

Average shares outstanding                       26,298,153          22,655,243            25,625,642            22,311,770

Earnings per common share:
Net income                                  $        0.67       $         0.49       $         1.63      $            1.05
                                           -----------------   -----------------   -------------------  --------------------

</TABLE>
<PAGE>


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

                                                                Nine months ended
                                                       --------------------------------------
                                                             September 27,         September 28,
                                                                 1997                 1996
---------------------------------------------------------------------------------------------
           <S>                                                   <C>                     <C>
Cash flows from operating activities:

Net Income                                              $       41,833      $       23,510
Adjustments to net income:
    Depreciation and amortization                               52,120              47,179
    Other items affecting cash                                  19,210             (16,917)
      from operating activities
                                                       -----------------   ------------------
Net cash provided by operating activities                      113,163              53,772
                                                       -----------------   ------------------
Cash flows from investing activities:
  Capital expenditures, net of
    proceeds on sales                                          (78,758)            (70,711)
  Acquisition of Transus and Interamerican                          -              (31,265)
                                                       -----------------   ------------------
Net cash used in investing activities                          (78,758)           (101,976)
                                                       -----------------   ------------------
Cash flows from financing activities:
  Dividends paid                                                (6,926)             (6,149)
  Proceeds from sale of common stock                            69,431                   -
  Proceeds from sale of treasury stock                           5,927               2,407
  Proceeds from long-term debt                                       -              52,000
  Payments on long-term debt                                   (78,223)                428
                                                       -----------------   ------------------
Net cash provided by (used in) financing activities             (9,791)             48,686
                                                       -----------------   ------------------
Net increase in cash                                            24,614                 482
                                                       -----------------   ------------------
Cash at beginning of period                                      4,090               1,707
                                                       -----------------   ------------------
Cash at end of period                                   $       28,704      $        2,189
                                                       -----------------   ------------------
</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 and nine
months ended  September 27, 1997 are not  necessarily  indicative of the results
that  may be  expected  for  the  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)
<TABLE>
<CAPTION>

                                                      Quarter ended                           Nine months ended
                                                      September 27, 1997                      September 27, 1997
                                                    and September 28, 1996                  and September 28, 1996
                                           ------------------------------------------------------------------------------
Company (Region)                               Revenue     Operating Ratio (b)          Revenue     Operating Ratio (b)
-------------------------------------------------------------------------------------------------------------------------
      <S>                                      <C>               <C>                  <C>                   <C>
Holland (Midwest)                       97  $  180,758           89.8 %           $   520,708              90.7 %
                                        96     153,725           90.6                 440,800              91.4
Red Star (Northeast)                    97      50,001           98.9                 144,984              99.5
                                        96      48,571          101.6                 147,961             102.8
Reddaway (West Coast, Northwest)        97      53,072           89.7                 146,455              93.0
                                        96      46,383           92.2                 132,506              94.6
Bestway (Southwest)                     97      34,533           85.7                  98,465              86.6
                                        96      28,416           88.9                  84,321              89.4
Dugan (Plains, South)                   97      44,041           95.2                 127,206              95.5
                                        96      38,543           96.1                 111,755              97.8
Logistics Operations                    97      26,455           92.8                  77,764              94.3
                                        96      22,969           94.7                  62,073              97.3

</TABLE>

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







<PAGE>






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


     USFreightways Corporation ("the Company")
reported  record  net  income  for the 13  weeks  ended  September  27,  1997 of
$17,542,000,  a 59%  increase  over the  $11,024,000  which was reported for the
thirteen weeks ended September 28,1996. Net income per share of 67 cents for the
1997 quarter,  on an average of 26,298,153  shares, is the highest ever earnings
per share in the  Company's  history and  represents a 37% increase  over the 49
cents per share on 22,655,243  average shares  outstanding for the third quarter
of 1996.  Record revenue for the 1997 quarter of  $393,462,000  increased  14.6%
when compared to the  $343,203,000 for the same quarter of 1996. In the regional
trucking  group,  LTL revenue  increased 15.5% and truckload  revenue  increased
7.8%.

   LTL shipments in the 1997 quarter  increased by 9.8% and the average  revenue
per LTL shipment  increased  3.4% compared to last year,  after  estimating  the
impact of the unusual  increase in  shipments  of less than two hundred  pounds,
which resulted from the sixteen day UPS strike in August.

    Revenue in the current  year's  quarter in the logistics  group  amounted to
$26,455,000,  an  increase of 15.2%.  Operating  income  improved  56.2% and the
operating  ratio  improved to 92.8% in the current year's  quarter,  compared to
94.7% for the same period of 1996.

         Revenue  for  the  nine  months  ended   September   27th  amounted  to
$1,130,042,000,  an increase of 14.3% over the same period of the previous year.
Net income for the nine month period in 1997 amounted to $41,833,000, equivalent
to $1.63 per share, compared to $1.05 per share for the 1996 nine month period.

         The Company is extremely  pleased with the record  results  achieved in
the third  quarter of the  current  year,  which is directly  attributable  to a
relatively  strong US  economy,  a stable  pricing  environment,  an  ability to
increase  market share in the  Company's  various  business  enterprises,  and a
continuing  emphasis on cost  reduction in all units of the Company.  During the
third  quarter of the  current  year,  all of the  Company's  regional  trucking
companies  improved their  operating  ratios  compared to the same period of the
previous year and, overall as a group, the operating ratio improved to 91.3 from
93.1 in the same quarter of the previous year. The reduction in operating ratios
and  corresponding   improvement  in  operating  income  was  led  by  excellent
performance at USF Bestway, USF Reddaway and USF Holland, where operating ratios
of 85.7,  89.7 and 89.8  respectively,  were  achieved.  USF Dugan  continued to
improve,  attaining a 14.3%  increase in revenue,  a 38.9% increase in operating
income,  with a  moderate  improvement  in the  operating  ratio.  USF Red  Star
achieved modest profitability for the fourth straight quarter.

         On September 12th,  substantially all of the assets of Comet Transport,
the  Company's  truckload  subsidiary,  were sold to CRST, a longhaul  truckload
trucking  company.  On the same date,  the Company  also  entered  into a 3 year
agreement  with  CRST to  provide  longhaul  truckload  service  for each of the
Company's regional trucking subsidiaries for their partnership freight. Proceeds
from the sale  were  slightly  above  book  value  and,  therefore,  no loss was
incurred on the disposal of this business.

         Subsequent to the end of the fiscal quarter,  the Company  concluded an
agreement to acquire all of the issued and outstanding  shares of SEKO Worldwide
and subsidiary companies. SEKO Worldwide is a domestic and international freight
forwarder with forty-eight facilities in the United States, and provides service
to seventy countries through both exclusive and non-exclusive  agent facilities.
Consolidated  revenue for SEKO  Worldwide  for the year ended  December 31, 1996
amounted to $105,000,000, and for the 1997 year, is annualizing at approximately
$120,000,000.  The  Company  is  enthusiastic  about  the  acquisition  of  SEKO
Worldwide which will permit the  USFreightways  group of companies to accelerate
its 1998 growth rate,  and to provide both  international  and domestic  freight
forwarding services to the Company's customers. <PAGE>

          The  outlook  for the last  quarter of this year is  positive  and the
Company expects to continue to see an improvement in its profitability  over the
same period of the previous year,  assuming  there is no material  change in the
stable pricing environment or the level of economic activity.


         Capital  expenditures  for  the  current  year's  quarter  amounted  to
approximately  $42 million,  of which $30 million was for revenue  equipment and
$12 million was for  terminal  facilities  and  miscellaneous  equipment,  which
compares to capital  expenditures  of $27 million for the third quarter of 1996.
Year-to-date  capital  expenditures  through  September were $90 million,  which
compares to 1996 capital  expenditures for the nine month period of $101 million
(which included $27 million for the acquisition of Transus).

          On February 10, 1997, the Company sold an additional  3,105,000 shares
of its common stock through a public offering. The sale generated  approximately
$69,000,000, net of expenses, in new equity.

          A  dividend  of 9 1/3  cents per  share  was paid  October  3, 1997 to
shareholders of record on September 19, 1997.

          This release contains  forward looking  statements that 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.

                  As previously reported on Form 8-K filed January 7,1997, on or
                  about  November 1, 1996,  a judgment  was entered  against the
                  Company's  subsidiary,  USF Bestway  Inc.  for  $3,500,000  in
                  actual  damages and $1,750,000 in attorneys fees together with
                  court costs and  interest.  USF Bestway  Inc. has appealed the
                  judgment to the Dallas Court of Appeals.

                  Management  of the Company  believes  that it has good grounds
                  for obtaining a reversal of the judgment on appeal  because it
                  believes,  among other reasons,  that the judgment  entered on
                  the basis of the procedural  technicality of counsel's failure
                  to comply with the  requirements  of Texas law  concerning the
                  signature  of  pleadings by counsel will not be sustained by a
                  reviewing  court.  The Company  further  believes the judgment
                  will be  vacated  and the matter  remanded  for a trial on the
                  merits and that,  in any event,  the  judgment,  if sustained,
                  will not  have a  material  adverse  effect  on the  Company's
                  financial condition. In the event the judgment is sustained on
                  appeal,  management of the Company's  subsidiary,  USF Bestway
                  Inc.  intends to pursue potential causes of action against all
                  appropriate parties.

                  Also, the Company is involved in other  litigation  arising in
                  the ordinary course of business,  primarily  involving  claims
                  for  bodily  injuries  and  property   damages.   The  Company
                  maintains  insurance coverage to insure against these types of
                  claims. 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.

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.       On September 19, 1997, the Company filed a
                                    Current  Report on Form 8-K.




<PAGE>






                              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, 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