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 SEPT. 28, 2002, 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.)

  8550 W. Bryn Mawr Ave.,Suite 700                         60631
             Chicago, Illinois
     (Address of principal executive offices)           (Zip Code)

                     Registrant's telephone number
                    including area code: (773) 824-1000


                            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 November 1,2002  26,941,758 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 28,          December 31,
                                                      2002                    2001
-----------------------------------------------------------------------------------------------------
        <S>                                            <C>                    <C>
Assets
Current assets:
     Cash                                    $        74,676        $         79,534
     Accounts receivable, net                        328,492                 295,876
     Other                                            74,030                  70,840
                                                -----------------     -------------------
          Total current assets                       477,198                 446,250
                                                -----------------     -------------------

Property and equipment, net                          738,155                 732,520
Goodwill                                             100,504                 171,708
Other intangible assets, net                           1,474                   3,016
Notes receivable                                       9,236                   5,036
Other assets                                          20,491                  20,134
                                                -----------------     -------------------
Total assets                                    $  1,347,058        $      1,378,664
                                                -----------------     -------------------

Liabilities and Stockholders' Equity
Current liabilities:
     Current bank debt                          $        416        $          1,037
     Accounts payable                                 98,377                  89,979
     Accrued salaries, wages and benefits            107,426                  90,497
     Accrued claims and other                         94,514                  84,198
                                               -----------------      ------------------
     Total current liabilities                       300,733                 265,711
                                               -----------------      ------------------
Long-term liabilities:
     Long-term bank debt                              2,225                    2,774
     Notes payable                                  250,000                  250,000
     Accrued claims and other                        81,085                   77,055
     Deferred income taxes                           92,243                   93,617
                                              -----------------     ------------------
            Total long-term liabilities             425,553                  423,446
                                              -----------------     ------------------
Minority interest                                        -                     1,855

Stockholders' equity                                620,772                   687,652
                                             -----------------     ------------------
Total liabilities and stockholders' equity   $    1,347,058        $        1,378,664
                                             -----------------     ------------------
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>

<page>
                                      USFreightways Corporation
                             Condensed  Consolidated Statements of Operations
                   Unaudited (Dollars in Thousands, Except Per-Share Amounts)

<TABLE>
<CAPTION>
                                                    Three Months Ended                    Nine Months Ended
                                        -------------------------------------    ------------------------------------
                                            September 28,     September 29,    September 28,     September 29,
                                                    2002              2001             2002              2001
-----------------------------------------------------------------------------   -----------------------------
      <S>                                        <C>                 <C>            <C>                <C>
Operating revenue:
     LTL Trucking                            $   483,318       $     461,391      $ 1,388,709      $  1,385,719
     TL Trucking                                  29,649              24,534           83,484            74,794
     Logistics                                    67,707              67,663          203,852           205,737
     Freight Forwarding                           56,048              64,992          167,193           197,595
     Intercompany eliminations                    (2,189)                  -           (6,208)                -
                                                 _______             _______        _________        __________
Total operating revenue                          634,533             618,580        1,837,030         1,863,845

Operating expenses:
     LTL Trucking                                 452,729            430,692        1,312,742         1,302,178
     TL Trucking                                   28,075             24,169           79,492            72,709
     Logistics                                     64,823             63,223          196,602           196,282
     Freight Forwarding                            66,017             73,840          187,444           212,629
     Freight Forwarding-
         Asia exit costs                                -                  -           12,760                 -
     Corporate and other                            7,275               4,728          22,283             14,024
     Intercompany eliminations                     (2,189)                  -          (6,208)                 -
                                                 ________           _________        ________          _________
Total operating expenses                          616,730             596,652       1,805,115          1,797,822

Income from operations                             17,803              21,928          31,915             66,023
                                                 ________           _________       _________           ________
Non-operating income (expense):
     Interest expense                              (5,185)             (5,236)        (15,640)           (16,218)
     Interest income                                  384                 322           1,795                710
     Other, net                                      (428)               (199)           (788)                18
                                                 ________            ________        _________          _________
Total non-operating expense                        (5,229)             (5,113)         (14,633)          (15,490)
                                                 ________            ________        _________           ________
Income before income                               12,574              16,815           17,282            50,533
      taxes, minority interest, and
      cumulative effect of
      accounting change

Income tax expense                                 (7,255)             (6,763)         (13,686)          (20,090)
Minority interest                                       -                (321)               -              (838)
                                                  _______               _____           ______            _______
Income before cumulative                            5,319               9,731            3,596             29,605
     effect of accounting change
Cumulative effect of change in
  accounting for goodwill                              -                   -            (70,022)               -
                                                  ______                _____           _______            ______
Net income/(loss)                          $       5,319          $     9,731        $  (66,426)       $   29,605
                                                  ======                =====           =======            ======

Income per share before
    Cumulative effect : Basic              $       0.20           $      0.37        $     0.13        $     1.13
                        Diluted            $       0.19           $      0.36        $     0.13        $     1.11
(Loss) per share - cumulative
  effect:               Basic              $          -           $         -        $    (2.60)       $        -
                        Diluted            $          -           $         -        $    (2.56)       $        -
Net income/(loss)per share: Basic          $       0.20           $      0.37        $    (2.47)       $     1.13
                            Diluted        $       0.19           $      0.36        $    (2.43)       $     1.11


Average shares outstanding:  Basic           26,924,123            26,335,517         26,872,059        26,267,763
                             Diluted         27,338,300            26,912,541         27,344,357        26,765,551

See accompanying Notes to Condensed Consolidated Financial Statements.

</TABLE>
<PAGE>



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

                                                             Nine Months Ended
                                                      ----------------------------
                                                    September 28,    September 29,
                                                            2002             2001
--------------------------------------------------------------------------------------
               <S>                                       <C>              <C>
Cash flows from operating activities:

Net income/(loss)                                  $      (66,426)    $    29,605
Adjustments to net income/ (loss):
    Depreciation and amortization                          76,442          83,552
    Cumulative effect of change in accounting              70,022              -
        for goodwill
     Impairment of long-lived assets                        7,804              -
     Other items affecting cash                              (258)         33,292
      from operating activities
                                                     --------------    -------------
Net cash provided by operating activities                   87,584        146,449

                                                      --------------   -------------
Cash flows from investing activities:
  Capital expenditures                                     (90,486)       (58,802)
  Proceeds on sales on property and equipment                5,700          7,677
  Disposition of USF Asia                                   (6,000)             -
                                                      --------------   -------------
Net cash used in investing activities                      (90,786)       (51,125)
                                                      --------------   -------------
Cash flows from financing activities:
  Dividends paid                                            (7,497)        (7,318)
  Proceeds from sale of stock                                7,011         12,612
  Proceeds from long-term debt                                  -          10,000
  Payments on long-term debt                                  (549)       (17,403)
  Net change in short-term debt                               (621)       (27,869)
                                                       --------------  -------------
Net cash used in financing activities                       (1,656)       (29,978)
                                                        -------------- -------------
Net increase/(decrease) in cash                             (4,858)        65,346
                                                         -------------- -------------
Cash at beginning of period                                 79,534          5,248
                                                         -------------- -------------
Cash at end of period                                  $    74,676     $   70,594
                                                         -------------- -------------
Supplemental disclosure of cash flow information:
     Cash paid during the year for:
          Interest                                      $    9,890     $   10,928
          Income taxes                                      10,793         12,965

See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>







                              USFreightways Corporation
     Condensed Consolidated Statements of Changes in  Stockholders' Equity
                         Unaudited (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                      Nine Months Ended
                                                     -----------------
                                           September 28,         September 29,
                                                   2002                  2001

      <S>                                        <C>                   <C>
Balance as of December 31, 2001, and 2000,    $  687,652           $  635,176
     respectively
Net income/(loss)                               (66,426)               29,605
Foreign currency translation adjustments             67                   (57)
                                               --------               -------
   Comprehensive income/(loss)              $   (66,359)            $   29,548

Proceeds from sale of stock                       7,011                 12,612
Dividends declared                               (7,532)                (7,366)

                                              ----------             ----------
Balance as of September 28, 2002 and
September 29, 2001,respectively             $   620,772             $  669,970
                                                =======                =======
See accompanying Notes to Condensed Consolidated Financial Statements.


</TABLE>
<PAGE>





                 Notes to Condensed Consolidated Financial Statements

                       (Dollars in Thousands, Except Per Share Amounts)
                                    (Unaudited)

1. Summary of significant accounting policies

     General -

     The consolidated financial statements include the accounts of USFreightways
and our wholly-owned  subsidiaries.  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.  Intercompany balances and transactions have been eliminated. Our
consolidated  financial  statements for prior periods have been  reclassified to
conform with the current presentation. Our results of operations are affected by
the  seasonal  aspects of the trucking  and air freight  industries.  Therefore,
operating  results  for the three and nine months  ended Sept.  28, 2002 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2002. We report on a calendar year basis.  Our quarters  consist of
thirteen  weeks  that end on the  Saturday  nearest  the end of March,  June and
September.  For further information,  refer to consolidated financial statements
and  footnotes  thereto  included in our annual report on Form 10-K for the year
ended December 31, 2001.

2. Earnings per share


     Basic  earnings/  (loss) per share are  calculated  on net  income/  (loss)
divided by the  weighted-average  number of common shares outstanding during the
period.  Diluted earnings per share are calculated by dividing net income by the
weighted-average  number of common shares outstanding plus the shares that would
have been  outstanding  assuming the issuance of common  shares for all dilutive
potential  common  shares.  Unexercised  stock  options,  calculated  under  the
treasury  stock  method,  are the only  reconciling  items between our basic and
diluted  earnings per share.  The number of options included in the denominator,
used to calculate diluted earnings per share are reported in the table below:

              Three months ended               Nine months ended
September 28, 2002  September29, 2001  September 28, 2002    September 29, 2001
__________________  _________________  __________________     _________________
   414,177               577,024            472,298                497,788
<PAGE>



3. Debt

     Our debt  includes  $100 million of unsecured  guaranteed  notes due May 1,
2009 and $150 million of unsecured guaranteed notes due April 15, 2010.

     Our guaranteed notes are fully and unconditionally  guaranteed,  on a joint
and several basis, on an unsecured  senior basis, by all our direct and indirect
domestic  subsidiaries (the "Subsidiary  Guarantors").  We are 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  shown  in our
consolidated  statements.   Our  management  believes  that  separate  financial
statements of, and other disclosures with respect to, the Subsidiary  Guarantors
are not meaningful or material to investors.

     As of September  28, 2002,  we had a $200 million  credit  facility  with a
group of banks that was set to expire in November  2002.  This  facility was for
working  capital,  general  corporate  funding needs, and up to $100 million for
letters of credit we issue under our self-insurance program. As of September 28,
2002 we had no borrowings drawn under the facility, but we had approximately $67
million in issued letters of credit.

     On October 24, 2002 we entered  into a new three year $200  million  credit
facility  with a group  of banks  to  replace  our  existing  facility  that was
scheduled to expire on November 24, 2002. (See Footnote 10 - Subsequent Events)

4. Stock repurchases

     On July 24, 2000,  we announced the  authorized  buyback of up to 1 million
additional  shares of our  common  stock in  either  public  market  or  private
transactions. This repurchase program is not yet completed. There were no shares
repurchased in the first,  second or third quarters of 2002 or the first, second
or third  quarters of 2001.  From July 24, 2000 through  September  28, 2002, we
have repurchased  454,200 shares; the last share repurchase occurred in the 2000
fourth quarter.

5.   Notes receivable

     USF Asia Group, Ltd.

     On January 18, 2002 USF  Worldwide  relinquished  its  interest in USF Asia
Group, Ltd., its freight forwarding joint venture in Asia. A one-time payment of
$10  million  was made to Asia  Challenge,  Ltd.,  a Hong Kong  based  logistics
company and USF Worldwide's  former joint venture  partner.  We also provided $6
million in loans to Asia. The loans  included a $3.0 million  secured loan and a
$3.0 million  unsecured loan. Both loans were due on June 30, 2005 and each bore
interest at the six-month LIBOR plus 1%. Interest was payable quarterly.  Income
from  operations  and  income  before  income  taxes,  minority  interest  , and
cumulative  effect of  accounting  change were  reduced by  approximately  $12.8
million  in the  first  quarter  as a  result  of this  transaction.  No net tax
benefits  were  recorded  with the  transaction.  (See  Footnote 10-  Subsequent
Events)


 Auto Warehousing Company ("AWC")

     We have notes  receivable  from AWC, a company  that we owned  until  1993,
totaling $5.2 million ($2.0 million in accounts receivable) as of Sept. 28, 2002
and $5.7 million as of December 31, 2001.  Amendments to the original notes were
executed in August 2002. In accordance with the  amendments,  the notes now bear
interest at the Prime rate plus 1.0%. Additionally, beginning in September 2003,
the notes will bear  interest  at the Prime rate plus 5.0%.  Interest is payable
quarterly and is current.  Principal  payments of $0.5 million are due quarterly
beginning in September  2002 with a final  installment  due March 31, 2005.  The
notes are  secured by a lien on all assets of AWC and a  personal  guarantee  by
AWC's owner including a pledge by the owner of 100% of his stock in AWC.

     Our notes receivable are secondary to loans due from AWC to banks. AWC made
its required  principal  payment to us in September  2002. We have evaluated the
carrying value of these notes  receivable,  and based on AWC's ongoing operating
results, we believe the notes receivable from AWC will be collected in full.

<PAGE>


6. Goodwill and other intangible assets

     Under Statement of Financial  Accounting Standards (SFAS) No. 142 "Goodwill
and Other Intangible Assets",  previously recorded goodwill and other intangible
assets  with  indefinite  lives  are no  longer  amortized  but are  subject  to
impairment tests annually.  Effective  January 1, 2002  amortization of goodwill
ceased under the  standard.  In the third  quarter of 2001,  we  amortized  $1.6
million of goodwill. As a result of implementing this new standard on January 1,
2002,  we recorded an  impairment  charge of $70 million at USF  Worldwide,  our
freight  forwarding  segment.  The  charge was shown as a  cumulative  effect of
change in accounting for goodwill in the first quarter.  In the third quarter of
2002,  we made a  contractual  payment  to the  former  owners of USF  Worldwide
Logistics Ltd. ("USF UK") of $4.7 million.  The amount was recorded as goodwill,
and then we  recorded an  impairment  charge for the entire  $4.7  million.  The
charge was included in Operating expenses.  Intangibles consist of the following
<TABLE>
<CAPTION>
                                                             September 28, 2002  September 29, 2001
                                                             __________________  _________________
                                                             Gross                                        Gross
                                               Average       Carrying   Accumulated         Carrying     Accumulated
                                               Life (Yrs)    Amount     Amortization         Amount       Amortization


                                            __________      ________   ____________        _________  ____________
            <S>                                <C>            <C>          <C>               <C>          <C>
Amortized intangible assets:
     Customer lists                              5          $  6,073    $ (4,748)        $    6,073     $  (3,541)
     Non-competes                                5             5,404      (5,255)             8,198        (7,311)
                                                            ________    _________            _______    __________
Total                                                       $ 11,477    $(10,003)        $    14,271    $ (10,852)
                                                              ======     =======              ======     ========
Intangible assets not subject to amortization:
     Goodwill                                               $100,504   $       -         $   213,429    $ (40,039)
                                                             =======    ========            =======     ========
</TABLE>
Aggregate amortization expense
   For the nine months ended September 28, 2002             $  1,103

Estimated amortization expense for each of the years ended December 31
is as follows:
                               2002                $  1,408
                               2003                     866
                               2004                     265
                               2005                      38
                                                    _______
                              Total                   2,577
                                                     =======
The changes in carrying amount of goodwill for the nine month period ended
September 28 2002  is as follows:
<TABLE>
<CAPTION>
                                                                Freight       Corporate
                                    LTL       TL  Logistics     Forwarding    and other
                                segment    segment  segment     segment         segment     Total
                                 _______  _______  _________ _________________   _____     ______
     <S>                          <C>        <C>      <C>          <C>            <C>       <C>
Balance as of January 1, 2002    $57,273   $10,574  $32,657      $71,204         $  -    $171,708
Impairment losses                     -          -       -       (71,204)           -     (71,204)
Additions - UK                                                     4,699            -       4,699
Impairment losses - UK                                            (4,699)           -      (4,699)
                                 _______   _______  _______       _______        _______ _________
Balance as of September 28, 2002 $57,273   $10,574 $32,657       $     -            -    $ 100,504
                                 =======    ====== ======         =======        ======    =======
</TABLE>

<PAGE>

The following table adjusts earnings and earnings per share for the adoption of
SFAS No. 142.
<TABLE>
<CAPTION>

                                              Three Months Ended              Nine Months Ended
                                        September 28,   September 29,     September 28,   September 29,
                                                2002             2001             2002            2001
                                        ____________    _____________     ____________    ____________
     <S>                                      <C>             <C>                <C>            <C>
Reported net income/ (loss)              $   5,319       $    9,731         $  (66,426)     $   29,605
Add back: goodwill amortization,                 -            1,623                  -           4,581
      net of tax                           _________       ________          __________      _________
Adjusted net income/(loss)               $   5,319       $   11,354         $  (66,426)     $   34,186
Add back cumulative effect
      of accounting change                       -                -              70,022              -
                                            ________      __________          _________        ________
Adjusted net income before
     cumulative effect of accounting
     change                              $   5,319       $   11,354         $     3,596      $  34,186
                                           =======           ======             =======         ======
Basic earnings/ (loss) per share:
  Reported basic EPS                     $    0.20       $     0.37         $     (2.47)     $    1.13
  Add back goodwill amortization                 -             0.06                   -           0.17
       net of tax                          ________        ________              _______     _________
Adjusted basic EPS                       $    0.20       $     0.43         $     (2.47)     $    1.30
Add back cumulative effect of
     accounting change                           -                -                 2.60             -
                                           _______           _______             ________       _______
Adjusted basic EPS before cumulative
     effect of accounting change        $     0.20        $    0.43         $       0.13     $    1.30
                                            =======          =======              =======      =======
Diluted earnings/ (loss) per share:
   Reported diluted EPS                 $     0.19        $    0.36         $      (2.43)    $    1.11
   Add back goodwill amortization                -             0.06                    -          0.17
        net of tax                         ________        _________              _______   __________
Adjusted diluted EPS                    $     0.19        $    0.42         $      (2.43)    $    1.28
Add back cumulative effect of
     accounting change                          -                 -                 2.56             -
                                           ________          _______             ________      ________
Adjusted diluted EPS before
     Cumulative effect of accounting
     change                             $     0.19        $    0.42         $        0.13    $    1.28
                                           ========         ========              =======      =======
Weighted average shares:
     Basic                                  26,924           26,335                26,872       26,268
     Diluted                                27,338           26,912                27,344       26,766


</TABLE>

<PAGE>







7. Long Lived Assets

     During the second  quarter the extent of operating  losses of USF Worldwide
caused a review of the  recoverability  of it's long-lived assets under SFAS No.
144.  These assets  included  primarily  property and equipment  and  intangible
assets.  We  determined  that the  long-lived  assets were  impaired  based upon
estimates  of future cash flows and  discounted  prices for  similar  assets and
recorded a charge in the second  quarter of 2002 amounting to $7.8 million ($6.1
million of the charge was recorded in the Freight  forwarding  segment while the
remaining  $1.7 million of the charge was  recorded in  Corporate  and Other) to
write down the assets to their fair value.

8. Recent Accounting Pronouncements


     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44  and  64,   Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections." The pronouncement  rescinds FASB Statement No. 4, "Reporting Gains
and Losses from  Extinguishments  of Debt",  and an amendment of that Statement,
FASB  Statement No. 64,  "Extinguishments  of Debt Made to Satisfy  Sinking-Fund
Requirements."   The   pronouncement   also  rescinds  FASB  Statement  No.  44,
"Accounting  for  Intangible  Assets of Motor  Carriers" and amends SFAS No. 13,
"Accounting  for  Leases," to eliminate  an  inconsistency  between the required
accounting  for  sale-leaseback  transactions  and the required  accounting  for
certain  lease  modifications  that have  economic  effects  that are similar to
sale-leaseback transactions. SFAS No. 145 will be effective for us on January 1,
2003. We have  evaluated  this  statement and  determined  that there will be no
impact on our consolidated financial statements.

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal Activities". SFAS No. 146 requires companies to
recognize the costs  associated  with exit or disposal  activities when they are
incurred.  Currently  these types of costs are recognized at the time management
commits the company to the exit / disposal  plan in  accordance  with EITF Issue
No. 94-3,  Liability  Recognition for Certain Employee  Termination Benefits and
Other  Costs  to  Exit  an  Activity  (including  Certain  Costs  Incurred  in a
Restructuring). This statement is effective for exit or disposal activities that
are initiated  subsequent to December 31, 2002.  Accordingly,  we will apply the
provisions  of  SFAS  No.  146  prospectively  to exit  or  disposal  activities
initiated subsequent to December 31, 2002.


<PAGE>


<TABLE>
<CAPTION>





9.  Segment Reporting                          Three Months Ended              Nine Months Ended
      (Dollars in Thousands)              September 28,    September 29,  September 28, September 29,
                                                  2002             2001           2002          2001
------------------------------------------------------------------------------- ---------------------
    <S>                                      <C>              <C>             <C>             <C>
Revenue
   LTL Group:
      USF Holland                      $     245,765   $      237,030     $   715,165    $   717,410
      USF Reddaway                            72,065           68,872         202,648        201,832
      USF Red Star                            68,877           64,488         198,608        194,409
      USF Dugan                               57,011           53,384         160,606        156,491
      USF Bestway                             39,600           37,617         111,682        115,577
------------------------------------------------------------------------------- ----------------------
         Sub total LTL Group                 483,318          461,391       1,388,709      1,385,719
   Truckload - USF Glen Moore                 29,649           24,534          83,484         74,794
   Logistics subsidiaries                     67,707           67,663         203,852        205,737
   Freight forwarding                         56,048           64,992         167,193        197,595
   Corporate and other                             -                -               -              -
   Intercompany eliminations                  (2,189)               -          (6,208)             -
------------------------------------------------------------------------------- ----------------------
Total Revenue                           $    634,533    $     618,580      $ 1,837,030   $ 1,863,845
Income/(loss) from Operations
   LTL Group:
      USF Holland                       $     18,820    $      20,064      $    51,664    $  56,826
      USF Reddaway                             9,537            7,768           20,513       18,476
      USF Red Star                            (1,017)            (599)          (4,680)      (2,389)
      USF Dugan                                  451            1,219            1,923        4,602
      USF Bestway                              2,798            2,247            6,547        6,026
------------------------------------------------------------------------------- ---------------------
         Sub total LTL Group                  30,589           30,699           75,967       83,541
   Truckload - USF Glen Moore                  1,574              365            3,992        2,085
   Logistics subsidiaries                      2,884            4,440            7,250        9,455
   Freight forwarding                        ( 9,969)  (1)     (8,848)         (20,251)(1,2)(15,034)
   Freight forwarding -
      Asia exit costs                              -                -          (12,760)           -
   Corporate and other                        (7,275)          (4,728)         (22,283)  (2)(14,024)
------------------------------------------------------------------------------- ------------------------------------------
Total Income from Operations             $    17,803    $      21,928        $  31,915  $    66,023
------------------------------------------------------------------------------  ------------------------------------------
(1)  Includes impairment charges totaling $4,699.
(2) Includes impairment charges totaling $7,804, of which $6,089 is  in Freight
    forwarding and $1,715 is included in Corporate and other.
</TABLE>


Footnote 10.   Subsequent Events

Freight Forwarding Segment

     Following extended losses in the freight forwarding  business and review of
our overall strategy,  we concluded that the freight  forwarding  business ("the
USF Worldwide Group") did not fit as one of our core businesses. As a result, on
October 18, 2002, we announced the execution of an agreement with GPS Logistics,
Inc. and Seko Worldwide  Acquisitions LLC  (collectively  "the  Transferees") to
transfer our interest in the USF Worldwide Group. As a condition to the transfer
and in consideration to Transferees' obligation to assume ownership of the stock
of the USF Worldwide  Group,  we agreed to contribute $17 million in cash to USF
Worldwide Inc. As part of the agreement,  the Transferees  have the option for a
period of up to six months  from  closing to return  their  interest  in certain
assets to us for $3 million in cash.  In the  fourth  quarter we will  record an
after  tax loss of  approximately  $10 - 13  million  on this  transaction.  The
transaction closed on October 30, 2002.

     As part of our divestiture of the USF Worldwide Group, our non-core freight
forwarding  business,  $6.0  million in loans made to Asia in January  2002 were
forgiven (See Footnote 5 - Notes Receivable USF Asia Group, Ltd.).

     The  following  pro forma  financial  statements  for the third quarter and
year-to-date  illustrate the effect of the Freight  Forwarding  operations as if
the results had been reported as discontinued operations:
<PAGE>


                              USFreightways Corporation
                     Pro Forma Condensed Consolidated Statements of Operations
               Unaudited (Dollars in Thousands, Except Per-Share Amounts)
<TABLE>
<CAPTION>
                                       Three Months Ended                 Nine Months Ended
                              -------------------------------------    ------------------------------------
                              September 28,      September 29,      September 28,   September 29,
                                      2002               2001               2002            2001
--------------------------------------------------------------------------------------------------------------
     <S>                         <C>                  <C>                <C>              <C>
Operating revenue:
     LTL Trucking             $   483,318       $     461,391       $  1,388,709     $  1,385,719
     TL Trucking                   29,649              24,534             83,484           74,794
     Logistics                     67,707              67,663            203,852          205,737
     Asia operations                    -               7,252                  -           17,450
     Intercompany eliminations     (2,189)                 -              (6,208)               -
                            -------------        ------------         ----------       ----------
Total operating revenue           578,485             560,840          1,669,837        1,683,700

Operating expenses:
     LTL Trucking                 452,729             430,692          1,312,742        1,302,178
     TL Trucking                  28, 075              24,169             79,492           72,709
     Logistics                     64,823              63,223            196,602          196,282
     Freight Forwarding-
         Asia exit costs                -                   -             12,760                 -
     Asia operations                    -               7,825                  -            19,232
     Corporate and other            7,262               4,180             20,395            12,326
     Intercompany eliminations     (2,189)                  -             (6,208)                -
                            --------------       -------------        ----------        ----------
Total operating expenses          550,700             530,089          1,615,783         1,602,727
                             -------------       -------------        ----------        ----------
Income from operations             27,785              30,751             54,054            80,973
                            --------------       ------------         ----------        ----------
Non-operating income (expense):
     Interest expense              (5,110)            (5,127)            (15,340)          (15,830)
     Interest income                  373                433               1,771                704
     Other, net                      (419)              (178)               (800)              (278)
                              ------------       ------------         ----------          ----------
Total non-operating expense        (5,156)            (4,872)            (14,369)           (15,404)
                            --------------       ------------        ----------           ----------
Income from continuing             22,629              25,879             39,685              65,569
     operations before income
      taxes, minority interest, and
     cumulative effect of
     accounting change
Income tax expense                 (9,183)           (10,026)            (20,059)            (25,503)
Minority interest                       -               (321)                  -                (838)

Income from continuing
  operations                       13,446             15,532              19,626              39,228

Discontinued operations
     Loss from operations of
     Freight Forwarding segment  (10,055)             (9,064)            (22,403)            (15,036)
     Income tax benefit            1,928               3,263               6,373               5,413
                                 -------             -------            --------            ---------
Loss on discontinued operations   (8,127)             (5,801)            (16,030)             (9,623)
                               ---------            ---------        -----------           ----------
Income  before cumulative          5,319               9,731               3,596               29,605
     effect of accounting change

Cumulative effect of change in
  accounting for goodwill             -                    -             (70,022)                  -
                           -------------        ------------          ----------          ----------
Net income/(loss)          $       5,319         $     9,731        $    (66,426)         $   29,605
                            ------------        ------------         ----------           ----------

Income per share from
continuing operations:Basic $      0.50          $      0.59        $       0.73          $     1.49
                    Diluted $      0.49          $      0.58        $       0.72          $     1.47
Loss per share from
discontinued operations:Basic  $  (0.30)         $     (0.22)       $      (0.60)         $    (0.36)
                      Diluted  $  (0.30)         $     (0.22)       $      (0.59)         $    (0.36)
Loss per share - cumulative
  effect:               Basic  $      -          $         -        $      (2.60)         $        -
                      Diluted  $      -          $         -        $      (2.56)         $        -
Netincome/(loss)per share:Basic$   0.20          $      0.37        $      (2.47)         $     1.13
                        Diluted$   0.19          $      0.36        $      (2.43)         $     1.11


Average shares outstanding:
                     Basic   26,924,123            26,335,517         26,872,059           26,267,763
                   Diluted   27,338,300            26,912,541         27,344,357           26,765,551
                        ---------------       ---------------        -----------           ----------
</TABLE>
<PAGE>



Replacement Credit Facility


     On October 24, 2002 we entered  into a new three year $200  million  credit
facility  with a group  of banks  to  replace  our  existing  facility  that was
scheduled to expire on November 24, 2002. Like our prior credit  facility,  this
new facility is for working capital,  general corporate funding needs, and up to
$125 million for letters of credit we issue under our self-insurance program. As
of November 1, 2002 we had no borrowings  drawn under the  facility,  but we had
approximately $67 million in issued letters of credit.

     The facility  bears  interest at LIBOR plus a margin  depending on our debt
rating.  In  addition,  there are other fees  associated  with the  facility and
certain financial  covenants including minimum net worth and maximum funded debt
to adjusted cash flow.

<PAGE>

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


Results of Operations

     We ("USFreightways  Corporation") reported net income for the quarter ended
September 28, 2002 of $5.3 million,  compared to net income of $9.7 million that
was reported for the quarter ended September 29, 2001. For year-to-date  through
September 28 and September 29, of 2002 and 2001, we reported a net loss of $66.4
million and net income of $29.6 million,  respectively.

     The net income per share for the current  year's  quarter was equivalent to
$0.19  diluted  earnings  per share.  Net income per share for the 2001  quarter
amounted to $0.36 diluted  earnings per share. Net income for the current year's
quarter  included  a pre-tax  charge of $4.7  million  relating  to  contractual
payments to former owners of USF Worldwide  Logistics Ltd. ("USF UK") one of the
operating units within our freight forwarding segment. This payment was recorded
as goodwill and we subsequently recorded an impairment charge in accordance with
Statement of Financial  Accounting  Standard (SFAS) No. 142, "Goodwill and Other
Intangible  Assets".  Earnings in the current  quarter from our core  operations
which  includes   Less-than-truckload   ("LTL")  regional  trucking   companies,
Truckload  ("TL"),  Logistics and Corporate and Other segments amounted to $0.49
diluted  earnings per share compared to $0.60 diluted  earnings per share in the
2001 third quarter.  Losses in our non-core operations in the freight forwarding
segment (including USF Worldwide,  Inc., USF UK, and USF Asia) amounted to $0.30
diluted loss per share in the current quarter compared to $0.24 diluted loss per
share in the 2001 third quarter.We  reported a third quarter 2001 loss per share
from discontinued  operations,  in Footnote 10 - Subsequent Events, amounting to
$0.22.  The  difference  amounts to a $0.02 loss per share from USF Asia that is
considered  non-core  operations in this  paragraph,  but for GAAP accounting is
considered part of continuing operations.

     We  announced  on October  18, 2002 that we have an  agreement  to sell our
non-core  freight  forwarding  business  (USF  Worldwide  Inc. and USF Worldwide
Logistics Ltd.).  The transaction  closed on October 30, 2002 (See Footnote 10).

     The net loss for year to date 2002 amounted to $66.4 million  equivalent to
($2.43)  diluted loss per share  compared to net income of $29.6 million  ($34.2
million  before  amortization  of goodwill - see Footnote 6) equivalent to $1.11
diluted earnings per share ($1.28 diluted earnings per share before amortization
of goodwill - see footnote 6) in the first nine months of 2001. The net loss for
the first nine  months of 2002  included  pre-tax  charges of $12.8  million for
relinquishing  USF  Worldwide's  interest  in USF Asia in early  January,  $70.0
million related to goodwill  impairment at USF Worldwide upon  implementation of
SFAS No. 142, $4.7 million related to goodwill  impairment at USF UK recorded in
accordance  with SFAS No. 142 and $7.8  million  relating  to  long-lived  asset
impairment  under SFAS No. 144 (also at USF  Worldwide).  Year to date  earnings
before these charges amounted to approximately $0.94 diluted earnings per share.
Of the $95.3 million total pre-tax charges taken, $80.6 million were non-cash.

     We  reported  revenue for the third  quarter  ended  September  28, 2002 of
$634.5 million  compared to $618.6 million  reported for the third quarter which
ended September 29, 2001.  Revenue for the first nine months of 2002 amounted to
$1.84 billion a 1.4% decline from the $ 1.86 billion in revenue reported for the
first nine months of 2001.

     Total revenue for the current quarter at the regional trucking subsidiaries
increased  4.7% to $483.3  million  compared to $461.4 million in the 2001 third
quarter. On September 2, 2002, Consolidated  Freightways Corporation of Delaware
Inc. ("CF") filed for bankruptcy and ceased operations.  After CF's closure, our
regional trucking  subsidiaries picked up a portion of CF's business and related
revenue. Revenue from our new PremierPlus product (revenue from shipments moving
between our regional trucking  subsidiaries) which had previously  accounted for
approximately 11% of total revenue in the regional trucking subsidiaries grew to
14% of total revenue in the month of September due in part to revenue  picked up
after CF's closure.  LTL shipments and tonnage in July and August 2002 increased
by  approximately  4.0% over the same periods in 2001. LTL shipments and tonnage
in  September  2002  increased  by 8.6%  and  7.5%,  respectively,  compared  to
September  2001-  largely due to CF's  closure.  Total  revenue at the  regional
trucking subsidiaries increased by approximately 8.0% in September 2002 compared
to September 2001.
<PAGE>

     There were 63 working days in the current  year's and last year's  quarter.
On a  comparable  working  day basis,  total  revenue in the 2002 third  quarter
increased by 3.3% over the second  quarter of 2002  (included 64 working  days).
Fuel  surcharges,  which are  included  in the  reported  revenue,  declined  by
approximately 0.6% as a percent of revenue compared to last year's third quarter
as fuel  prices  declined.  LTL  revenue  before fuel  surcharges  increased  by
approximately  5.2% in the 2002 quarter compared to the 2001 third quarter.  LTL
shipments  increased  5.9% and LTL  tonnage  increased  5.4%.  LTL  revenue  per
shipment  decreased  1.2% from  $115.93  to $114.58  as the  average  weight per
shipment  decreased 0.5% from 1,112.6 pounds to 1,106.9 pounds.  On a comparable
working day basis,  LTL  shipments  and LTL  tonnage  were  basically  flat when
compared to the 2002 second quarter.

     Total  revenue for the first nine months of 2002 at the  regional  trucking
subsidiaries,  reversing earlier trends,  increased slightly to $1,388.7 million
compared to $1,385.7  million in the first nine months of 2001. Year to date LTL
shipments  increased by 2.3%,  LTL tonnage  increased  by 1.5%,  LTL revenue per
shipment  declined  by 1.8% to $112.57 and the weight per  shipment  declined by
0.8% to 1,108.0  pounds  from  1,116.8  pounds in the first nine months of 2001.
Fuel  surcharges,  included in the reported  revenue,  declined by approximately
1.2% as a percent of revenue  compared to last year's  first nine months as fuel
prices declined.

     Operating earnings for the regional trucking  subsidiaries,  in the current
year's quarter, were $30.6 million compared to $30.7 million for the same period
of 2001. The  consolidated  operating  ratio for the LTL group increased to 93.7
from 93.3 in the third  quarter  of 2001.  Despite a still  underlying  sluggish
economy but augmented by CF's closure in early September,  USF Reddaway reported
an  improvement  in its  operating  ratio  by 1.9  operating  points,  on a 4.6%
increase in  revenue,  in the  current  quarter to 86.8  compared to last year's
third  quarter  operating  ratio  of 88.7  (mainly  from  improvements  in fuel,
labor,operating  taxes and  depreciation  expenses that were somewhat  offset by
increases in operating  and  purchased  transportation  expenses).  USF Holland,
operating  in the  central  states  where the economy is heavily  influenced  by
manufacturing,  particularly in the automotive area,  increased  revenue by 3.7%
compared  to last  year's  third  quarter and  reported  an  operating  ratio of
92.3compared  to 91.5 in the 2001 third  quarter  (increases in labor and claims
expenses  were  somewhat  offset by  decreases in fuel  expenses).  USF Bestway,
reversing  earlier  growth  declines,  reported  an  increase in revenue of 5.3%
compared to last year's third quarter and improved its  operating  ratio to 92.9
compared  to 94.0 in the 2001  third  quarter  due to  lower  claims  and  other
operating  expenses offset  slightly by an increase in purchased  transportation
expenses in the 2002 quarter.  USF Dugan recorded a revenue  increase of 6.8% in
the current  quarter  compared to the 2001 third quarter.  USF Dugan operated at
99.2 in the 2002 third  quarter  compared to 97.7 in last year's third  quarter.
USF Dugan  incurred $0.6 million in costs in the current  quarter  related to an
environmental  matter.  Without these environmental  costs, USF Dugan would have
reported an operating  ratio of 98.1.  USF Red Star  recorded a 101.5  operating
ratio in the 2002 third quarter  compared to 100.9 in last year's third quarter.
The closure of CF, in  September,  and APA  earlier in the year  allowed USF Red
Star to increase  revenue by 6.8% in the current quarter compared to last year's
third  quarter.  USF Red Star  improved  its  current  quarter  operating  ratio
compared to the 2002 second quarter  operating  ratio of 101.8.  Improvements in
fuel, workers'  compensation and depreciation  expenses were offset by increases
in labor and purchased transportation expenses.
<PAGE>

     Operating  earnings for the regional  trucking  companies in the first nine
months of 2002  amounted  to $76.0  million,  a  decrease  of 9.1%  compared  to
operating  earnings of $83.5 million in the first nine months of 2001 due mainly
to the  sluggish  economy.  The  consolidated  operating  ratio for the regional
trucking  companies  for the first nine months of 2002 was 94.5 compared to 94.0
for the first nine months of 2001. Year over year operating  ratio  improvements
occurred at USF Bestway (due mainly to reduced claims expenses in the 2002 first
nine  months) and USF  Reddaway  (due mainly to lower fuel  expenses in the 2002
first nine months).  USF Red Star's  operating ratio increased in the first nine
months of 2002  compared  to the first nine months of 2001.  Despite  additional
business  gained  from  the  closures  of APA and  CF,  USF  Red  Star  incurred
additional labor and purchased  transportation  expenses in order to service the
higher business  volumes.  USF Holland  reported an increase in its year to date
operating  ratio to 92.8 in the first nine months of 2002  compared to a 92.1 in
the first nine  months of 2001 as the economy in the  central  states  (which is
heavily  automotive  related) has been the most  adversely  impacted.  USF Dugan
reported an increase in operating ratio in the first nine months of 2002 to 98.8
from 97.1 in the first nine months of 2001 as it incurred  additional  labor and
purchased transportation costs in order to improve service products.  Additional
environmental costs were incurred as mentioned above.

     As  truckload  revenue  per total mile  increased  in the  current  quarter
compared to the 2001 third  quarter and its customer  base  increased,  USF Glen
Moore,  our TL carrier recorded a 20.8% revenue increase to $29.6 million in the
2002 third quarter. USF Glen Moore had operating earnings of $1.6 million and an
operating  ratio of 94.7 compared to $0.4 million profit and an operating  ratio
of  98.5  in  the  2001  third  quarter  as  improvements  in  labor,  purchased
transportation  and claims  expenses were partially  offset by increases in fuel
expenses.

     USF Glen Moore reported revenue in the first nine of 2002 of $83.5 million,
an increase of 11.6% compared to $74.8 million in the first nine months of 2001.
Operating  earnings for the first nine months of 2002  improved by 91.5% to $4.0
million  from $2.1  million in the first nine  months of 2001 and its  operating
ratio  improved to 95.2 in 2002 from 97.2 in 2001 due mainly to  improvement  in
truckload revenue per mile and reductions in fuel, labor and claims costs.

     As part of USF Glen Moore's service offerings, it hauls freight for our LTL
regional  trucking  companies.  Therefore,  the  intercompany  revenue  that  is
eliminated  on our  Consolidated  Statements  of  Operations  and Footnote No. 8
Segment  Reporting is that revenue  generated and recorded by USF Glen Moore for
the  services it provides to our LTL  regional  trucking  companies  who in turn
record an expense for transportation services in their results.

     Revenue in the  Logistics  group  amounted to $67.7  million in the current
quarter  (virtually  the same as  recorded  in the prior  year).  Revenue at USF
Logistics  increased by 6.0%. Earnings in the Logistics group decreased by 35.0%
from $4.4  million in the 2001 third  quarter to $2.9  million in the 2002 third
quarter as a softness in the retail  industry and early losses  incurred for new
warehouse   operations   adversely   impacted  their  results.   USF  Processors
contributed lower revenue in the 2002 quarter  amounting to approximately  $10.2
million  compared  to  approximately  $13.4  million in last  year's  quarter as
volumes  from  a  major  customer  were  significantly  reduced.  As  Processors
exercised  cost  controls on lower  revenue  volumes,  it reported an  operating
profit of $ 0.3 million for the current quarter compared to $ 0.8 million in the
2001 third quarter,  and  significantly  improved its profits from a 2002 second
quarter small operating loss.


     Revenue in the  Logistics  group for the first nine months of 2002 declined
by 0.9% to $203.9 million compared to $205.7 million in the first nine months of
2001.  USF  Logistics  increased  revenue as new  distribution  centers  and new
contracts started up while USF Processors reported lower revenue as volumes from
a major  customer  were  significantly  reduced in the first nine months of 2002
compared to the first nine months of 2001. Operating earnings decreased by 23.3%
to $7.2  million  in the first  nine  months of 2002 as USF  Logistics  reported
increased profits from recently opened distribution  centers, but USF Processors
reported a loss of $1.3 million in the current year compared to a profit of $1.3
million in the first nine months of 2001.
<PAGE>

     Revenue in the non-core Freight Forwarding segment decreased 13.8% to $56.0
million from $65.0  million in the 2001 third  quarter.  $7.3 million of revenue
was reported in USF Asia in the 2001 third quarter, whereas there was no revenue
reported in the 2002 third quarter because we  relinquished  our interest in USF
Asia in the first week of 2002. Despite the significant efforts of the segment's
management  team at  controlling  fixed  and  variable  costs,  continued  lower
business levels and revenue from  operations  have led to continued  significant
losses.  The segment  reported an operating  loss of $10.0 million  (including a
goodwill impairment charge recorded in accordance with SFAS No. 142 in USF UK as
a result of a $4.7 million contractual payment made to the former owners). Lower
profits  resulted  primarily  from lower gross  margins  due to reduced  volumes
compared to last year. An additional  charge of $2.0 million was incurred in USF
Worldwide in recognition of certain doubtful  accounts.  The segment recorded an
operating  loss of $8.8 million in the 2001 third quarter  including  charges of
$5.9  million  relating to  severance,  downsizing  and other costs  relating to
preparations for the implementation of a new freight management system.

     Revenue in the non-core Freight Forwarding segment in the first nine months
of 2002  declined by 15.4% to $167.2  million  from $197.6  million in the first
nine  months of 2001.  USF Asia  reported  revenue of $17.5  million in the 2001
first nine  months  while  there was no revenue  reported in the 2002 first nine
months as we  relinquished  our  interest in USF Asia in the first week of 2002.
Freight forwarding  domestic revenue at USF Worldwide declined by 8.7% to $141.9
million.  The segment  reported a 2002 first nine months operating loss of $20.3
million  (excluding  Asia exit costs of $12.8 million)  including a $6.1 million
charge under SFAS No. 144 and a $4.7 million charge in accordance  with SFAS No.
142.  Last year's first nine months  operating  loss  amounted to $15.0  million
(which includes $5.9 million relating to severance and other downsizing costs).

     Freight  Forwarding - Asia exit costs are the $12.8 million charge taken to
relinquish the interest in USF Asia. Included in the costs is a one-time payment
of $10.0 million to Asia Challenge,  Ltd., a Hong Kong based  logistics  company
and USF Worldwide's former joint venture partner (see also Footnote 5).

     Corporate  and other  expenses  increased by $2.5 million in the 2002 third
quarter to $7.3  million  compared  to $4.7  million in the 2001 third  quarter.
Corporate  expenses increased by $4.2 million in the 2002 third quarter compared
to the 2001 third quarter as our  information  technology  group (IT)  increased
expenses  in  the  current  quarter  as it  continued  to  upgrade  systems  and
infrastructure  and  explore the  plausibility  of a single  freight  management
system for the regional  trucking  companies.  Other  expenses  decreased in the
quarter by approximately  $1.7 million.  Due to the  implementation  of SFAS No.
142,  amortization of non-goodwill  intangible  assets in the 2002 third quarter
decreased  to  $0.3  million  compared  to  $2.0  million  amortization  on  all
intangible assets in the 2001 third quarter.


     Corporate and other  expenses for the first nine months of 2002 amounted to
$22.3  million  compared  to $14.0  million  in the first  nine  months of 2001.
Corporate  expenses  increased by $11.2 million in the first nine months of 2002
compared  to the  first  nine  months  of  2001  primarily  due to our IT  group
increasing  its expenses as it continues to upgrade  systems and  infrastructure
across all of the  business  segments and explore the  plausibility  of a single
freight  management system for the regional trucking  companies.  Other expenses
included an asset  impairment  charge of $1.7 million  relating to USF Worldwide
(see  comments  above)  which was  recorded  in the  second  quarter  of 2002 in
accordance with SFAS No. 144. Non-goodwill amortization amounted to $1.1 million
for the first nine months of 2002 compared to $5.7 million for the  amortization
on all intangible assets in the first nine months of 2001.


     Income tax expense is calculated  on income  before income taxes,  minority
interest and cumulative effect of accounting change and before the $12.8 million
Asia exit costs and the $4.7 million USF UK goodwill  charge  (there were no net
tax benefits recorded with respect to these costs). Therefore, adding back these
items  increases  the  reported  amount of $17.3  million to the taxable  income
before taxes amount of $34.1 million.
<PAGE>


     The following table provides an analysis of the effective tax rates for the
third quarters and years-to-date for 2002 and 2001:
<TABLE>
<CAPTION>

                                               3rd Qtr.       3rd Qtr.          YTD           YTD
                                                  2002           2001          2002          2001
                                               _______         ______          ____          ____
    <S>                                         <C>             <C>            <C>           <C>
Reported income before income taxes,
minority interest and cumulative effect
of accounting change                             12,574         16,815        17,282       50,533
Income tax expense                               (7,255)        (6,763)      (13,686)     (20,090)
Effective tax rate                                 57.7%          40.2%         79.2%        39.8%

Add back /(subtract) to/(from) income
before income taxes, minority interest
and cumulative effect of accounting change:
            Goodwill impairment- USF UK           4,699              -         4,699             -
            Minority interest                         -           (321)           -           (838)
            Asia exit costs                           -              -        12,760             -
            Capital gain                              -              -          (644)            -
                                                 ______         ______        ______          ______
Adjusted income before income taxes              17,273         16,494        34,097         49,695

Income tax expense                               (7,255)        (6,763)      (13,686)       (20,090)

Adjusted effective tax rate                        42.0%          41.0%        40.1%           40.4%

</TABLE>


                          Other Matters

     Contracts with the  International  Brotherhood  of Teamsters  ("Teamsters")
expire  with our USF Holland and USF Red Star  subsidiaries  on March 31,  2003.
Negotiations are in process with the Teamsters for a new contract.

<PAGE>


                         Liquidity and Capital Resources

     Cash flows from operating  activities  contributed $87.6 million during the
first nine months of 2002 compared to $146.4 million during the same period last
year. Our net loss of $66.4 million included  non-cash charges for write-offs of
goodwill and long-lived  assets at USF Worldwide  amounting to $70.0 million and
$4.5  million,   respectively.   Depreciation  of  property  and  equipment  and
amortization of non-goodwill  intangibles of  approximately  $76.4 million along
with the aforementioned non-cash goodwill write-off of $70 million and the fixed
asset  impairment  of $7.8 million  increased the net cash provided by operating
activities to $87.6 million. (See table below)


                                          Nine months ended   Nine months ended
            (Dollars in millions)        September 28, 2002   September 29, 2001
                                                ______________________________
   Cash flows from operating activities:
          Net Income before unusual charges         $   25.6      $   29.6
          Subtract unusual charges:
                Cash payment - USF Asia                (10.0)            -
                Cash payment - UK                       (4.7)            -
                Non-cash  USF Asia write-off            (2.8)            -
                Non-cash goodwill write-off            (70.0)            -
                Non-cash assets impairment             ( 4.5)            -
                                                    _________       _______
        Net income / (loss)                         $  (66.4)         $29.6
       Adjustments to reconcile net income to
          net cash provided by operating activities
                Depreciation and amortization       $   76.4           83.5
                (Increase)/ decrease in accounts
                   receivable and other                 (0.2)          33.3
                Goodwill write-off                      70.0              -
                Fixed assets impairment                  7.8              -
                                                    _________       ________
        Net cash provided by operating activities   $   87.6        $  146.4
                                                     ========        =======


     Other cash flows used in operating activities included a $10.0 million cash
payment  to USF  Worldwide's  former  joint  venture  partner  in  Asia  when we
relinquished  our interest in the joint  venture and a $4.7 million  contractual
payment to the former owners of our UK operation.  We also incurred $6.0 million
in investing activities for loans to USF Asia Group, Ltd.

     Other  items  affecting  cash from  operating  activities  included  in the
increase  /(decrease) in accounts receivable and other for the first nine months
of 2002  amounted to ($0.2)  million  including  increases  of $32.6  million in
accounts  receivable  offset by a similar  amount  from  increases  in  accounts
payable,  accrued wages and related benefits and insurance and claims. Last year
amounted to $33.3 million mainly due to increases in labor and related benefits,
insurance and claims accruals and income taxes payable.

     Capital  expenditures  for  the  first  nine  months  of 2002  amounted  to
approximately  $90.5  million  including  additions of $49.3 million for revenue
equipment,  $20.4 million for terminal facilities,  $6.1 million for information
technology  and $14.7  million for other capital  items.  Last year for the same
period, capital expenditures amounted to approximately $58.8 million,  including
additions  of $7.8  million for revenue  equipment,  $24.5  million for terminal
facilities,  $17.0  million for IT equipment  and $9.5 million for other capital
items.

     Total borrowings  decreased by $1.2 million during the first nine months of
2002 and we had  approximately  $66.7 million invested in overnight money market
deposits.  Our net debt to capital ratio  (decreasing debt by cash) was 22.3% at
Sept. 28, 2002 compared to 20.2% at December 31, 2001.
<PAGE>



     Our debt  includes  $150  million of unsecured  guaranteed  notes that were
floated in late April,  2000 and are due on April 15,  2010 and $100  million of
unsecured guaranteed notes due May 1, 2009.

     Our guaranteed notes are fully and unconditionally  guaranteed,  on a joint
and several basis, on an unsecured  senior basis, by all our direct and indirect
domestic  subsidiaries (the "Subsidiary  Guarantors").  We are 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  shown  in our
consolidated  statements.   Our  management  believes  that  separate  financial
statements of, and other disclosures with respect to, the Subsidiary  Guarantors
are not meaningful or material to investors.

     As of September 28, 2002 we had a $200 million credit facility with a group
of banks that was set to expire in November 2002.  This facility was for working
capital,  general corporate funding needs, and up to $100 million for letters of
credit we issue under our self-insurance  program. At September 28, 2002, we had
no borrowings drawn under the facility,  but we had approximately $67 million in
issued letters of credit.

     On October 24, 2002 we entered  into a new three year $200  million  credit
facility  with a group  of banks  to  replace  our  existing  facility  that was
scheduled to expire on November 24, 2002. Like our prior credit  facility,  this
new facility is for working capital,  general corporate funding needs, and up to
$125 million for letters of credit we issue under our self-insurance program. As
of November 1, 2002 we had no borrowings  drawn under the  facility,  but we had
approximately $67 million in issued letters of credit.

     The facility  bears  interest at LIBOR plus a margin  depending on our debt
rating.  In  addition,  there are other fees  associated  with the  facility and
certain financial  covenants including minimum net worth and maximum funded debt
to adjusted cash flow.


     On July 24, 2000,  we announced the  authorized  buyback of up to 1 million
additional  shares of our  common  stock in  either  public  market  or  private
transactions. This repurchase program is not yet completed. There were no shares
repurchased in the first,  second or third quarters of 2002 or the first, second
or third  quarters of 2001.  From July 24, 2000 through  September  28, 2002, we
have repurchased  454,200 shares; the last share repurchase occurred in the 2000
fourth quarter.


     A dividend of 9 1/3 cents per share  equivalent to $2.5 million was paid on
October 4, 2002 to shareholders of record on September 20, 2002.


<PAGE>


Recent Accounting Pronouncements


     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44  and  64,   Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections." The pronouncement  rescinds FASB Statement No. 4, "Reporting Gains
and Losses from  Extinguishments  of Debt",  and an amendment of that Statement,
FASB  Statement No. 64,  "Extinguishments  of Debt Made to Satisfy  Sinking-Fund
Requirements."   The   pronouncement   also  rescinds  FASB  Statement  No.  44,
"Accounting  for  Intangible  Assets of Motor  Carriers" and amends SFAS No. 13,
"Accounting  for  Leases," to eliminate  an  inconsistency  between the required
accounting  for  sale-leaseback  transactions  and the required  accounting  for
certain  lease  modifications  that have  economic  effects  that are similar to
sale-leaseback transactions. SFAS No. 145 will be effective for us on January 1,
2003. We have  evaluated  this  statement and  determined  that there will be no
impact on our consolidated financial statements.


     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal  Activities.  SFAS No. 146 requires companies to recognize
the costs  associated  with exit or disposal  activities when they are incurred.
Currently these types of costs are recognized at the time management commits the
company  to the exit / disposal  plan in  accordance  with EITF Issue No.  94-3,
Liability  Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring).  This
statement  is  effective  for exit or  disposal  activities  that are  initiated
subsequent  to  December  31,  2002.  Accordingly,  the  company  will apply the
provisions  of  SFAS  No.  146  prospectively  to exit  or  disposal  activities
initiated subsequent to December 31, 2002.


Item 3.           Quantitative and Qualitative Disclosures about Market Risk

     We are  exposed to the impact of interest  rate  changes.  Our  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.  There have
been no  borrowings  under this  agreement  in the 2002 first,  second and third
quarters.  The weighted  average annual interest rates on borrowings  under this
credit  agreement  were  6.3% in 2001.  In  addition,  we have $150  million  of
unsecured  notes with an 8 1/2% fixed annual  interest  rate and $100 million of
unsecured  notes with a 6 1/2% fixed annual interest rate at September 28, 2002.
We have no hedging  instruments.  From time to time,  we invest  excess  cash in
overnight  money  market  accounts.  At  September  28,  2002,  we had  invested
approximately  $67 million in  overnight  money  market  accounts  that  yielded
approximately 1.8% per annum.

     On October 24, 2002 we entered  into a new three year $200  million  credit
facility  with a group  of banks  to  replace  our  existing  facility  that was
scheduled to expire on November 23, 2002. Like our prior credit  facility,  this
new facility is for working capital,  general corporate funding needs, and up to
$125 million for letters of credit we issue under our self-insurance program. As
of November 1, 2002 we had no borrowings  drawn under the  facility,  but we had
approximately $67 million in issued letters of credit.

     The facility  bears  interest at LIBOR plus a margin  depending on our debt
rating.  In  addition,  there are other fees  associated  with the  facility and
certain financial  covenants including minimum net worth and maximum funded debt
to adjusted cash flow.


Item 4.   Controls and Procedures

     In order to ensure  information  for  disclosure in our filings of periodic
reports with the  Securities and Exchange  Commission is  identified,  recorded,
processed, summarized and reported on a timely basis, we have adopted disclosure
controls and procedures. Our Chief Executive Officer, Samuel K. Skinner, and our
Chief Financial  Officer,  Christopher L. Ellis, have reviewed and evaluated our
disclosure  controls and  procedures as of November 11, 2002 and have  concluded
that our disclosure controls and procedures were adequate as of that date.

     There have been no significant  changes in our internal controls,  which we
define to include our control  environment,  control procedures,  and accounting
systems,  or in other  factors  that could  significantly  affect  our  internal
controls, since November 11, 2002.

<PAGE>



PART II:  OTHER INFORMATION

Item 1. Legal Proceedings.

     We are a party to a number of proceedings  brought under the  Comprehensive
Environmental  Response,  Compensation and Liability Act, (CERCLA). We have 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. Our
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 our  financial  condition  or
results of operations and, to our best knowledge,  such liability,  if any, will
represent less than 1% of its revenues.

     Our  USF  Dugan   subsidiary   is  currently  the  subject  of  a  criminal
investigation by the City of Houston and an administrative  investigation by the
Texas  Commission  on  Environmental  Quality  arising from  inadvertent  diesel
releases from USF Dugan's  Northfield  facility  located in Houston  Texas.  USF
Dugan has taken  measures  to  respond  to the  environmental  effects  of these
releases  and to  curtail  further  releases.  USF Dugan has also  brought  suit
against the environmental  consultant who reviewed the Northfield facility prior
to USF Dugan's acquisition of the property in 1998.

     Also, we are 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 our financial condition or results of operations.


Item 2.Changes in Securities and Use of Proceeds.

       N/A

Item 3.Defaults Upon Senior Securities.

       N/A

Item 4.Submission of Matters to a Vote of Security Holders.

       N/A

Item 5.Other Information.

       N/A

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

         (a)Exhibits

         (b)Current Reports on Form 8-K were filed:

          1.A Current Report on Form 8-K was filed on August 12, 2002 announcing
          that the Company had  amended its  Quarterly  Report on Form 10-Q that
          was filed on May 10, 2002.

          2.A Current  Report on Form 8-K was filed on August 13, 2002 providing
          certain  statements by the Company's Chief Executive Officer and Chief
          Financial Officer as required by the Sarbanes-Oxley Act of 2002 and 18
          U.S.C. Section 1350.

<PAGE>

SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, we have duly caused this report to be signed on its behalf
by the undersigned,  thereunto duly authorized.  Dated the 12th day of November,
2002.


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

<PAGE>

CERTIFICATIONS

I, Samuel K. Skinner, certify that:

     1. I have  reviewed  this  quarterly  report on Form 10-Q of  USFreightways
        Corporation;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;


     4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

     b) evaluated the effectiveness of the registrant's  disclosure controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

     c)  presented  in  this  quarterly   report  our   conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;


     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors:


     a) all  significant  deficiencies  in the design or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     b) any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls; and


     6. The registrant's  other certifying  officer and I have indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  November 12, 2002


                                        /s/ Samuel K. Skinner
                                        _____________________
                                           Samuel K. Skinner
                                           President and Chief Executive
                                           Officer



<PAGE>

CERTIFICATIONS

I, Christopher L. Ellis, certify that:

     1. I have  reviewed  this  quarterly  report on Form 10-Q of  USFreightways
        Corporation;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

     b) evaluated the effectiveness of the registrant's  disclosure controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

     c)  presented  in  this  quarterly   report  our   conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the registrant's board of directors:

     a) all  significant  deficiencies  in the design or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     b) any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls; and

     6. The registrant's  other certifying  officer and I have indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:   November 12, 2002


                                      /s/ Christopher L. Ellis
                                      ________________________
                                          Christopher L. Ellis
                                          Senior Vice President, Finance, and
                                          Chief Financial Officer