UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549
                                    FORM 10-Q


(Mark One)

[X] Quarterly report pursuant to  Section 13 or 15(d) of the Securities Exchange
    Act of 1934  For the  quarterly period ended September 30, 1999 or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934  For the  transition  period from_______________to____________


Commission File Number:    0-26954


                     CONSOLIDATED DELIVERY & LOGISTICS, INC.
             (Exact name of Registrant as specified in its charter)


        Delaware                                          22-3350958
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)



380 Allwood Road                                                   07012
Clifton, New Jersey                                             (Zip Code)
(Address of principal executive offices)

                                 (973) 471-1005
              (Registrant's telephone number, including area code)

          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 __ No___

The  number of shares of common  stock of the  Registrant,  par value  $.001 per
share, outstanding as of October 31, 1999 was 7,311,026.


<PAGE>



                     CONSOLIDATED DELIVERY & LOGISTICS, INC.
               FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1999

                                      INDEX



                                                                       Page

Part I - Financial Information (unaudited)

         Item 1 - Financial Statements

            Consolidated Delivery & Logistics, Inc. and Subsidiaries
              Condensed Consolidated Balance Sheets as of September 30,
                  1999  and December 31, 1998                                 3
              Condensed Consolidated Statements of Income for the Three
                  and Nine Months Ended September 30, 1999 and 1998           4
              Condensed Consolidated Statements of Cash Flows for the
                  Nine Months Ended September 30, 1999 and 1998               5
              Notes to Condensed Consolidated Financial Statements            6

         Item 2 - Management's Discussion and Analysis of Financial
                      Condition and Results of Operations                    12

         Item 3 - Quantitative and Qualitative Disclosures about Market Risk 17


Part II - Other Information

         Item 1 - Legal Proceedings                                          18

         Item 6 - Exhibits and Reports on Form 8-K                           19

         Signature                                                           20



<PAGE>

<TABLE>


            CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)
<CAPTION>

                                                                    September 30,      December 31, 1998
                                                                         1999
                                                                  -----------------    ------------------
                                                                     (Unaudited)           (Note 1)

                             ASSETS

CURRENT ASSETS
<S>                                                                        <C>                   <C>
  Cash and cash equivalents                                                $1,442                $295
  Accounts receivable, net                                                 27,137              24,491
  Prepaid expenses and other current assets                                 3,623               2,560
                                                                  -----------------    ---------------
    Total current assets                                                   32,202              27,346

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net                                   6,156               6,630
INTANGIBLE ASSETS, net                                                     28,282              16,491
OTHER ASSETS                                                                2,402               1,621
                                                                  =================    ===============
    Total assets                                                          $69,042             $52,088
                                                                  =================    ===============

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Short-term borrowings                                                    $4,995             $13,577
  Current maturities of long-term debt                                      3,329               3,181
  Accounts payable and accrued liabilities                                 18,936              14,784
                                                                  -----------------    ------------------
    Total current liabilities                                              27,260              31,542

LONG-TERM DEBT                                                             22,875               6,383
OTHER LONG-TERM LIABILITIES                                                 2,983               2,756
                                                                  -----------------
                                                                                       ------------------
    Total liabilities                                                      53,118              40,681
                                                                  -----------------    ------------------

STOCKHOLDERS' EQUITY
 Preferred stock, $.001 par value; 2,000,000 shares
   authorized; no shares issued and outstanding                                 -                   -
 Common stock, $.001 par value; 30,000,000 shares
   authorized; 7,311,026 and 6,843,702 shares issued  and
   outstanding at September 30, 1999 and December 31, 1998,
   respectively                                                                 7                   7
 Additional paid-in capital                                                12,207               9,670
 Treasury stock, 29,367 shares at cost                                       (162)               (162)
 Retained earnings                                                          3,872               1,892
                                                                  -----------------    ------------------
    Total stockholders' equity                                             15,924              11,407
                                                                  =================    ==================
    Total liabilities and stockholders' equity                            $69,042             $52,088
                                                                  =================    ==================


</TABLE>


     See accompanying notes to condensed consolidated financial statements.


<PAGE>

<TABLE>

            CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)

<CAPTION>

                                                    For the Three Months Ended              For the Nine Months
                                                           September 30,                            Ended
                                                                                               September 30,
                                                  --------------------------------     -------------------------------
                                                       1999              1998             1999              1998
                                                  ---------------    -------------     ------------    ---------------

<S>                                                  <C>                <C>              <C>             <C>
     Revenue                                         $57,952            $48,229          $165,107        $135,507

     Cost of revenue                                  43,636             36,887           125,834         104,067
                                                  ---------------    -------------     ------------    ---------------

       Gross profit                                   14,316             11,342            39,273          31,440

     Selling, general, and
        administrative expenses                       10,479              9,155            30,392          26,550
     Depreciation and amortization                     1,205                915             3,287           2,146
                                                  ---------------    -------------     ------------    ---------------

       Operating income                                2,632              1,272             5,594           2,744

     Other (income) expense:
       Interest expense                                  840                341             2,365             839
       Other (income) expense, net                       290                (44)              (25)           (215)
                                                  ---------------    -------------     ------------    ---------------

     Income before provision
        for income taxes                               1,502                975             3,254           2,120

     Provision for income taxes                          599                372             1,274             807
                                                  ---------------    -------------     ------------    ---------------

     Net income                                         $903               $603            $1,980          $1,313
                                                  ===============    =============     ============    ===============

     Net income per share:
       Basic                                            $.12               $.09              $.28            $.20
                                                  ===============    =============     ============    ===============
       Diluted                                          $.11               $.09              $.26            $.19
                                                  ===============    =============     ============    ===============

     Basic weighted average common
        shares outstanding                             7,311              6,638             7,168           6,652
                                                  ===============    =============     ============    ===============
     Diluted weighted average common
        shares outstanding                             8,023              6,809             7,647           6,820
                                                  ===============    =============     ============    ===============

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


<PAGE>

<TABLE>

            CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<CAPTION>



                                                                                      For the Nine Months
                                                                              ------------------------------------
                                                                                      Ended September 30,
                                                                                     1999               1998
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                <C>                 <C>
Net income                                                                         $1,980              $1,313
Adjustments to reconcile net income to net cash provided by
       Operating activities -
    Gain on disposal of equipment and leasehold improvements                          (31)                (11)
    Depreciation and amortization                                                   3,287               2,146
    Amortization of debt discount                                                      84                   -
    Changes in operating assets and liabilities
      (Increase) decrease in -
        Accounts receivable, net                                                   (1,303)                287
        Prepaid expenses and other current assets                                    (952)               (407)
        Other assets                                                                 (781)               (188)
      Increase (decrease) in -
        Accounts payable and accrued liabilities                                    3,094               2,979
        Other long-term liabilities                                                  (220)               (189)
          Net cash provided by operating activities                                 5,158               5,930

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equipment and leasehold improvements                          166                  16
  Purchase of businesses, net of cash acquired                                     (6,438)             (4,786)
  Additions to equipment and leasehold improvements                                (1,056)             (1,882)
          Net cash used in investing activities                                    (7,328)             (6,652)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Short-term borrowings (repayments), net                                          (8,582)              2,462
  Borrowing of long-term debt                                                      15,000                 150
  Repayments of long-term debt                                                     (2,924)             (2,937)
  Issuance of stock warrants in connection with long-term financing                   885                   -
  Issuance of stock                                                                   267                   -
  Deferred financing costs                                                         (1,329)                  -
          Net cash provided by (used in) financing activities                       3,317                (325)

CASH PROVIDED BY DISCONTINUED OPERATIONS                                                -                  58

          Net increase (decrease) in cash and cash equivalents                      1,147                (989)
CASH AND CASH EQUIVALENTS, beginning of period                                        295               1,812
CASH AND CASH EQUIVALENTS, end of period                                           $1,442                $823

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


<PAGE>


            CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)      BASIS OF PRESENTATION:

         The accompanying  unaudited condensed consolidated financial statements
         have been prepared in accordance  with  generally  accepted  accounting
         principles for interim financial  information and with the instructions
         to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
         include all of the  information  and  footnotes  required by  generally
         accepted accounting principles for complete financial  statements.  The
         condensed  consolidated  balance  sheet at December 31, 1998,  has been
         derived  from the audited  financial  statements  at that date.  In the
         opinion of management,  all adjustments (consisting of normal recurring
         adjustments)  considered  necessary for a fair  presentation  have been
         included.  Operating  results  for the  three  and  nine  months  ended
         September 30, 1999, are not necessarily  indicative of the results that
         may be  expected  for any other  interim  period or for the year ending
         December 31, 1999. For further  information,  refer to the consolidated
         financial  statements and footnotes  thereto  included in the Company's
         Form 10-K for the year ended December 31, 1998.


(2)      BUSINESS COMBINATIONS:

         On February 16, 1999, Consolidated Delivery & Logistics, Inc. ("CDL" or
         the "Company") entered into and consummated an asset and stock purchase
         agreement  with  its  subsidiary,   Sureway  Air  Traffic   Corporation
         ("Sureway") and Victory Messenger Service,  Inc., Richard Gold, Darobin
         Freight  Forwarding Co.,  Inc.,("Darobin")  and The Trust Created Under
         Paragraph  Third of the Last Will and  Testament  of Charles  Gold (the
         "Trust"), (collectively "Gold Wings"), whereby Sureway purchased all of
         the  outstanding  shares of the capital stock of Darobin and certain of
         the assets and liabilities of the other sellers. The purchase price was
         comprised of  approximately  $3.0 million in cash  including  estimated
         direct  acquisition  costs,  $1,650,000 in a 7% subordinated  note (the
         "Note") and 200,000 shares of CDL common stock at $3.875 per share. The
         Note is due April 16, 2001 with interest payable  quarterly  commencing
         April 1, 1999. The Note is subordinate to all existing or future senior
         debt of CDL. In addition, a contingent earn out in the aggregate amount
         of up to  $520,000  is  payable  based on the  achievement  of  certain
         financial goals during the two year period  following the closing.  The
         earn out is payable 55% in cash and 45% in CDL common stock.

         On April 30, 1999,  CDL entered into and  consummated an asset purchase
         agreement  with its  subsidiary,  Silver Star  Express,  Inc.  ("Silver
         Star") and Metro Parcel Service,  Inc.,  Nathan  Spaulding and Kelly M.
         Spaulding,   (collectively,   "Metro  Parcel"),   whereby  Silver  Star
         purchased  certain of the assets and  liabilities of Metro Parcel.  The
         purchase  price  was  comprised  of  approximately  $710,000  in  cash,
         $202,734 in a 7% subordinated note (the "Metro Parcel Note") and 40,000
         shares of CDL's common stock at $3.25 per share.  The Metro Parcel Note
         is due April 30, 2001 with interest payable quarterly commencing August
         1, 1999. The Metro Parcel Note is subordinate to all existing or future
         senior debt of CDL.

         On April 30, 1999,  CDL entered into and  consummated an asset purchase
         agreement with its subsidiary,  Clayton/National  Courier Systems, Inc.

<PAGE>

         ("Clayton/National")  and Westwind Express,  Inc.,  Logistics  Delivery
         Systems,   Inc.,  Fastrak  Delivery  Systems,   Inc.,  Sierra  Delivery
         Services,  Inc.,  and  Steven S.  Keihner  (collectively,  "Westwind"),
         whereby   Clayton/National   purchased   certain   of  the  assets  and
         liabilities   of  Westwind.   The  purchase   price  was  comprised  of
         approximately $2,650,000 in cash, $1,680,000 in various 7% subordinated
         notes (the  "Westwind  Notes") and 149,533 shares of CDL's common stock
         at $3.21 per share.  The Westwind Notes are comprised of two-year notes
         due April 30,  2001 with a total  principal  amount of  $1,200,000  and
         three-year  notes due April 30, 2002 with a total  principal  amount of
         $480,000.   Interest  on  the  Westwind  Notes  is  payable   quarterly
         commencing  July 31, 1999.  The Westwind  Notes are  subordinate to all
         existing or future senior debt of CDL. In addition,  a contingent  earn
         out in the  aggregate  amount of up to $700,000 is payable based on the
         achievement  of certain  financial  goals  during  the two year  period
         following  the closing.  The earn out is payable 60% in cash and 40% in
         one year  promissory  notes bearing  interest at a rate of 7% per annum
         having similar terms as the Westwind Notes referred to above.

         On May 10, 1999,  CDL entered into and  consummated  an asset  purchase
         agreement  (the  "Skycab  Purchase  Agreement")  with  its  subsidiary,
         Sureway and Skycab, Inc. and Martin Shulman  (collectively,  "Skycab"),
         whereby Sureway purchased certain assets of Skycab.  The purchase price
         was  comprised  of  approximately  $78,100  in  cash.  In  addition,  a
         contingent  earn out is payable  for  sixteen  quarters  following  the
         closing date.  The amount of the earn-out per quarter is the greater of
         either $6,250 or 15% of collected  revenues for the three-month  period
         then ended, as defined in the Skycab Purchase Agreement.

         CDL financed  each of the above  acquisitions  using  proceeds from its
         revolving credit facility with First Union Commercial Corporation.  All
         of the above  transactions  have been  accounted for under the purchase
         method of  accounting.  Accordingly,  the allocation of the cost of the
         acquired  assets  and  liabilities  have  been made on the basis of the
         estimated fair value. The aggregate amount of goodwill recorded for the
         Gold Wings, Metro Parcel and Skycab  acquisitions is $6.4 million to be
         amortized over 25 years.  The goodwill for the Westwind  acquisition is
         $5.1 million to be amortized over 40 years. The consolidated  financial
         statements  include the operating results of Gold Wings,  Metro Parcel,
         Westwind, and Skycab from their respective acquisition dates.

         The following summarized unaudited pro forma financial  information was
         prepared  assuming  that the Gold Wings,  Metro  Parcel,  Westwind  and
         Skycab  acquisitions  occurred  on the  first day of such  periods  and
         include  certain  pro  forma  adjustments.   This  information  is  not
         necessarily  indicative  of the results the Company would have obtained
         had these events  actually  occurred on such dates or of the  Company's
         actual or future results (in thousands, except per share amounts).

<TABLE>
<CAPTION>

                                                                           (Unaudited)
                                          -------------------------------- -- --------------------------------
                                                Three Months Ended                   Nine Months Ended
                                          --------------------------------------------------------------------
                                                         (In thousands, except per share data)
                                          -------------- ----------------- -- --------------- ----------------
                                                           September 30,       September 30,    September 30,
                                             September          1998                1999            1998
                                             30, 1999        Pro Forma            Pro Forma       Pro Forma
                                              Actual         Combined            Combined        Combined
                                          -------------- ----------------- -- --------------- ----------------
<S>                                            <C>            <C>                 <C>             <C>
         Revenue                               $57,952        $48,229             $170,141        $153,747
         Income from Operations                  2,632          1,272                5,865           3,486
         Net Income                               $903           $603               $2,014          $1,361

         Net Income per
                  Share - basic                   $.12           $.09                 $.28            $.19
         Net Income per
                  Share - diluted                 $.11           $.09                 $.26            $.19

</TABLE>

<PAGE>


(3)      LONG-TERM DEBT:

         On January  29,  1999,  the Company  completed  a $15  million  private
         placement  of  senior   subordinated  notes  and  warrants  with  three
         financial  institutions.  The notes bear  interest at 12% per annum and
         are  subordinate  to all senior debt  including  the  Company's  credit
         facility with First Union. Under the terms of the notes, the Company is
         required to  maintain  certain  financial  ratios and comply with other
         financial  conditions  for which the  Company  is in  compliance  as of
         September  30,  1999.  The notes  mature on January 29, 2006 and may be
         prepaid by the Company under certain circumstances. The warrants expire
         on January 19, 2009 and are exercisable at any time prior to expiration
         at a price  of  $.001  per  equivalent  share of  common  stock  for an
         aggregate  of  506,250  shares  of  the  Company's  stock,  subject  to
         additional adjustments.  The Company has recorded the fair value of the
         warrants of $885,000 as a credit to  additional  paid-in-capital  and a
         debt discount on the senior  subordinated  notes.  The Company used the
         proceeds to finance  acquisitions and to reduce outstanding  short-term
         borrowings.

         In  September  1995,  the  Company  issued $2 million in the  aggregate
         principal amount of its 8% Subordinated Convertible Debentures (the "8%
         Debentures"). On April 1, 1998 the Company converted $740,000 of the $2
         million of the 8% Debentures to 10% Subordinated Convertible Debentures
         (the  "10%   Debentures")   and  issued   $150,000  of  additional  10%
         Debentures.  The  remaining 8%  Debentures,  totaling $1.3 million were
         repaid in August  1998.  On  August  21,  1999,  the  Company  redeemed
         $311,250 of the 10% Debentures  and issued another  $150,000 of the 10%
         Debentures. The 10% Debentures are convertible into Common Stock of the
         Company at a conversion  price of $5.00 per share,  accrue  interest at
         10% per annum, which is payable quarterly and extend the repayment date
         by one year from August 2000 to August  2001.  The 10%  Debentures  are
         redeemable  by the  Company,  in whole or in part,  without  premium or
         penalty at any time on or after August 18,  2000,  at their face amount
         plus accrued and unpaid  interest,  if any, to the date of  redemption.
         The 10% Debentures are redeemable at the option of the holder, in whole
         but not in part,  without premium or penalty,  at any time after August
         21, 2000. As a result, the 10% Debentures, totaling $728,750, have been
         classified as current maturities of long-term debt.


<PAGE>


(4)      REPORTABLE SEGMENTS:

         Effective  December 31, 1998,  CDL  implemented  Statement of Financial
         Accounting  Standards  No.  131,  "Disclosures  about  Segments  of  an
         Enterprise and Related  Information," ("SFAS 131"). SFAS 131 requires a
         company to disclose  reportable  segments  based on the way  management
         organizes  its segments for making  operating  decisions  and assessing
         performance.  CDL has two reportable segments: Air and Ground. Separate
         management  of each segment is required  because each  business unit is
         subject to different cost and delivery parameters.  Segment information
         for the three and nine month periods ended  September 30, 1999 and 1998
         is as follows (in thousands).


<TABLE>
<CAPTION>

                                                Three Months Ended                          Nine Months Ended
                                      ---------------------------------------      -------------------------------------
                                          Air         Ground        Total              Air       Ground        Total
                                      ------------- ------------ ------------      ----------- ------------ ------------
<S>                                       <C>          <C>          <C>              <C>         <C>           <C>
         Revenue from
             external customers
                   1999                    $16,773      $41,179      $57,952          $48,714     $116,393     $165,107
                   1998                     13,947       34,282       48,229           41,391       94,116      135,507
         Intersegment revenue
                   1999                         43          444          487               81        1,209        1,290
                   1998                         14          391          405               51        1,220        1,271
         Interest expense
                   1999                        243          597          840              698        1,667        2,365
                   1998                         99          242          341              256          583          839
         Depreciation and
               amortization
                   1999                        215          990        1,205              600        2,687        3,287
                   1998                        191          724          915              409        1,737        2,146
         Segment profit
                   1999                        543          360          903              724        1,256        1,980
                   1998                        126          477          603              262        1,051        1,313
         Segment assets
              Sept. 30, 1999                18,527       50,515       69,042           18,527       50,515       69,042
              Dec. 31, 1998                 11,489       40,599       52,088           11,489       40,599       52,088
         Expenditures for
              Segment assets
                   1999                       (53)          218          165               69          987        1,056
                   1998                        147          750          897              531        1,351        1,882

</TABLE>


<PAGE>


(5)      LITIGATION:

         In February 1996,  Liberty Mutual Insurance Company ("Liberty  Mutual")
         filed an action against Securities Courier Corporation  ("Securities"),
         a  subsidiary  of the  Company,  Mr.  Vincent  Brana and certain  other
         parties in the United States  District Court for the Southern  District
         of New York alleging,  among other things,  that Securities Courier had
         fraudulently  obtained  automobile  liability  insurance  from  Liberty
         Mutual in the late 1980s and early 1990s at below  market  rates.  This
         suit,  which claims  common law fraud,  fraudulent  inducement,  unjust
         enrichment and  violations of the civil  provisions of the Federal RICO
         statute,   among  other  things,   seeks  an   unspecified   amount  of
         compensatory  and  punitive  damages  from the  defendants,  as well as
         attorneys' fees and other expenses.  Three  additional  defendants were
         added by way of a second amended complaint on April 9, 1998. Securities
         and Mr. Brana have filed cross claims against each of these  additional
         defendants and certain  original  defendants who had acted as insurance
         brokers  for certain of the  policies at issue.  Under the terms of its
         acquisition  of Securities  Courier,  the Company has certain rights to
         indemnification from Mr. Brana. In connection with the indemnification,
         Mr.  Brana has  entered  into a  settlement  agreement  and  executed a
         promissory note and security  agreement securing up to $500,000 or such
         greater amount as may be due for any defense costs or award arising out
         of this suit.  Mr.  Brana has  delivered  150,000  shares of CDL common
         stock to the Company as collateral  security for the  promissory  note,
         which is due for repayment on December 1, 2002.

         On April  13,  1999 a  motion  for  summary  judgement  dismissing  the
         complaint,  based upon  statute of  limitation  defenses,  was filed on
         behalf of  Securities  and Mr.  Brana.  On  November  8, 1999 the Court
         denied  the  Motion for  Summary  Judgment  that was filed on behalf of
         Securities and Mr. Brana.  This matter will now proceed to a jury trial
         for  determination,  however  a trial  date has not yet been set by the
         Court.  The Court  scheduled a further hearing for November 23, 1999 to
         hear oral arguments of any motions that remain outstanding. The Company
         does not believe  that an adverse  determination  in this matter  would
         result  in a  material  adverse  effect on the  consolidated  financial
         position or results of operations of the Company.

         The Company is, from time to time, a party to litigation arising in the
         normal  course  of its  business,  most of which  involves  claims  for
         personal  injury and property  damage  incurred in connection  with its
         same-day ground and air delivery  operations.  Management believes that
         none of these actions,  including the action described above, will have
         a material  adverse effect on the  consolidated  financial  position or
         results of operations of the Company.




<PAGE>



(6)      INCOME (LOSS) PER SHARE:

         Basic  earnings  per share  includes  no  dilution  and is  computed by
         dividing   income    available   to   common    stockholders   by   the
         weighted-average  number of common shares  outstanding  for the period.
         Diluted  earnings per share reflects the potential  dilution if certain
         securities are converted.

         A  reconciliation  of weighted  average  common shares  outstanding  to
         weighted average common shares  outstanding  assuming  dilution follows
         (in thousands):
<TABLE>
<CAPTION>

                                                         Three Months Ended                  Nine Months Ended
                                                               September 30,                     September 30,
                                                 --------------------------------      ------------------------------
                                                 --------------- -- -------------      -------------     ------------
                                                      1999              1998               1999             1998
                                                 ---------------    -------------      -------------     ------------
                                                 ---------------    -------------      -------------     ------------
<S>                                                  <C>                <C>                <C>              <C>
         Basic weighted average
          common shares outstanding                  7,311              6,638              7,168            6,652
         Effect of dilutive securities:
           Stock Options                               206                171                192              168
             Warrants                                  505                  -                283                -
              ESPP                                       1                  -                  4                -
                                                 ---------------    -------------      -------------     ------------
         Diluted weighted average
           Common shares
           Outstanding                               8,023              6,809              7,647            6,820
                                                 ===============    =============      =============     ============

</TABLE>

         The  following   common  stock   equivalents  were  excluded  from  the
         computation  of diluted  earnings  per share  because  the  exercise or
         conversion  price was greater  than the average  market price of common
         shares:

<TABLE>

                                                         Three Months Ended                  Nine Months Ended
                                                               September 30,                    September 30,
                                                 --------------------------------
                                                 --------------- -- -------------      ------------- --- ------------
                                                        1999              1998               1999             1998
                                                 ---------------    -------------      -------------     ------------
                                                 ---------------    -------------      -------------     ------------
<S>                                                   <C>               <C>                 <C>              <C>
         Stock options                                555,442           578,129             555,442          578,129
         Subordinated
                 convertible debentures               145,750            161,818            145,750          161,818
         Seller financed
                convertible notes                     676,666            576,666            676,666          576,666

</TABLE>



<PAGE>


Item 2 - Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Overview

          The following discussion of the Company's results of operations and of
its  liquidity  and capital  resources  should be read in  conjunction  with the
condensed consolidated financial statements of the Company and the related notes
thereto which appear elsewhere in this report.

Disclosure Regarding Forward-Looking Statements

          The Company is provided a "safe harbor" for forward-looking statements
contained  in this report by the  Private  Securities  Litigation  Reform Act of
1995. The Company may discuss forward-looking information in this report such as
its  expectations  for future  performance,  growth and acquisition  strategies,
liquidity and capital  needs and its future  prospects.  Actual  results may not
necessarily  develop as the Company  anticipates due to many factors  including,
but not  limited  to the  timing of certain  transactions,  unexpected  expenses
encountered,  inability to conclude  acquisitions  on  satisfactory  terms,  the
effect of economic  and market  conditions,  the impact of  competition  and the
Company's   actual  results  varying   materially  from   management's   current
expectations.




RESULTS OF OPERATIONS


<TABLE>
<CAPTION>


                                                                Income  and  Expense as a Percentage of Revenue:
                                                  --------------------------------------------------------------------
                                                    For the Three Months Ended              For the Nine Months
                                                           September 30,                            Ended
                                                                                               September 30,
                                                  --------------------------------     -------------------------------
                                                       1999              1998             1999              1998
                                                  ---------------    -------------     ------------    ---------------

<S>                                                    <C>               <C>               <C>              <C>
     Revenue                                           100.0%            100.0%            100.0%           100.0%

     Gross profit                                       24.7%             23.5%             23.8%            23.2%

     Selling, general, and
        administrative expenses                         18.1%             19.0%             18.4%            19.6%
     Depreciation and amortization                       2.1%              1.9%              2.0%             1.6%

     Operating income                                    4.5%              2.6%              3.4%             2.0%

     Net income                                          1.6%              1.3%              1.2%             1.0%


</TABLE>

<PAGE>

Nine Months Ended September 30, 1999 Compared to Nine Months Ended September 30,
1998.

Revenue increased 21.8% from $135.5 million for the first nine months of 1998 to
$165.1 million for the first nine months of 1999.  Ground delivery  revenue grew
by 23.9% to $116.4  million and air courier  revenue grew 17.4% to $48.7 million
for the first nine months of 1999  compared to the same period in 1998.  Revenue
from the Company's recently completed acquisitions contributed $18.3 million and
$9.3  million  to  the  ground  revenue  and  air  courier  revenue   increases,
respectively.

Cost of revenue increased by $21.7 million,  or 20.9%, to $125.8 million for the
first  nine  months of 1999 as  compared  to the same 1998  period.  Stated as a
percentage  of revenue,  cost of revenue  decreased  by 0.6% for the nine months
ended  September  30,  1999 to 76.2% as compared to 76.8% for the same period in
1998. The improvement is due to efficiencies  gained with the  acquisitions,  as
well as, the  continued  repricing  or  elimination  of  unprofitable  accounts;
partially  offset by increased  fuel costs and the impact of  hurricanes  in the
third quarter of 1999.

Selling, general and administrative ("SG&A") expenses increased by $3.8 million,
or 14.3%,  to $30.4 million for the first nine months of 1999 as compared to the
same period in 1998. Stated as a percentage of revenue,  SG&A decreased to 18.4%
for the nine months ended  September  30, 1999 as compared to 19.6% for the same
period in 1998.  The  dollar  increase  is  primarily  attributable  to the SG&A
expenses of the acquired companies. Depreciation and amortization increased $1.2
million to $3.3  million  for the first  nine  months of 1999  compared  to $2.1
million for the first nine months of 1998 reflecting an increase to the goodwill
amortization expense recorded as a result of the Company's acquisitions.

As a result of the factors  discussed above,  operating income increased by $2.8
million,  or 104%, to $5.6 million for the nine months ended  September 30, 1999
as compared to the same period in 1998.

Net other  income  decreased  by  $190,000  or 88% to $25,000 for the first nine
months of 1999  resulting  primarily  from a net loss of $450,000 in  connection
with the  re-valuation of notes  receivable  related to two previous  subsidiary
sales. This loss was partially offset by a $250,000 gain on the termination of a
Franchise  Agreement and the related  covenants  against  competition.  Interest
expense  increased  by $1.5  million  for the first  nine  months of 1999 due to
increased borrowings to fund the Company's recent acquisitions.

Net income after tax increased by $667,000 or 50.8%,  to $1,980,000 for the nine
months ended September 30, 1999 as compared to $1,313,000 for the same period in
1998.

Three  Months  Ended  September  30,  1999  Compared to the Three  Months  Ended
September 30, 1998.

Revenue  increased 20.2% from $48.2 million for the third quarter of 1998 to $58
million for the third quarter of 1999.  Ground delivery revenue grew by 20.6% to
$41.2  million and air courier  revenue grew 19% to $16.8  million for the third
quarter of 1999 compared to the same period in 1998.  Revenue from the Company's
recently completed acquisitions contributed $5.2 million and $3.6 million to the
ground revenue and air courier revenue increases, respectively.

Cost of revenue  increased by $6.7 million,  or 18.3%,  to $43.6 million for the
third  quarter  of 1999  as  compared  to the  same  1998  period.  Stated  as a
percentage of revenue,  cost of revenue  decreased by 1.2% for the third quarter
ended  September  30,  1999 to 75.3% as compared to 76.5% for the same period in
1998. The improvement is due to efficiencies  gained with the  acquisitions,  as
well as, the  continued  repricing  or  elimination  of  unprofitable  accounts;
partially  offset by increased  fuel costs and the impact of  hurricanes  in the
third quarter of 1999.

<PAGE>

Selling, general and administrative ("SG&A") expenses increased by $1.3 million,
or 13.9%,  to $10.5  million for the thee  months  ended  September  30, 1999 as
compared to the same period in 1998.  Stated as a  percentage  of revenue,  SG&A
decreased to 18.1% for the three months ended  September 30, 1999 as compared to
19.0% for the same period in 1998. The dollar increase is primarily attributable
to the  administrative  expenses of the  acquired  companies.  Depreciation  and
amortization  increased  $290,000 to $1.2 million for the third  quarter of 1999
compared to $915,000 for the third quarter of 1998 reflecting an increase to the
goodwill   amortization   expense   recorded  as  a  result  of  the   Company's
acquisitions.

As a result of the factors  discussed above,  operating income increased by $1.4
million,  or 107.4%,  to $2.6 million for the three months ended  September  30,
1999 as compared to the same period in 1998.

Net other  expense  increased by $334,000 to $290,000  for the third  quarter of
1999  resulting  primarily  from a net loss of $600,000 in  connection  with the
re-valuation of notes receivable related to two previous  subsidiary sales. This
loss was partially  offset by a $250,000 gain on the  termination of a Franchise
Agreement  and the  related  covenants  against  competition.  Interest  expense
increased by $499,000 for the third quarter of 1999 due to increased  borrowings
to fund the Company's recent acquisitions.

Net income after tax  increased by $300,000 or 49.8%,  to $903,000 for the three
months ended  September  30, 1999 as compared to $603,000 for the same period in
1998.

LIQUIDITY AND CAPITAL RESOURCES

Working  capital  increased by $9.1 million from a deficit of $4.2 million as of
December 31, 1998 to working  capital of $4.9 million at September 30, 1999. The
increase results from a repayment of the Company's  short-term  borrowings under
the Revolving Credit Facility with proceeds from the senior  subordinated notes.
Cash and cash  equivalents  increased to $1.4  million as of September  30, 1999
from  $295,000 at  December  31,  1998.  Cash of $5.2  million  was  provided by
operations  for the nine  months  ended  September  30, 1999 as compared to cash
provided by  operations  of $5.9  million  for the same period in 1998.  For the
first  nine  months of 1999,  cash used in  investing  activities  totaled  $7.3
million as compared to $6.7  million for the same period in 1998.  The  increase
primarily results from the use of cash during 1999 to purchase  businesses.  For
the  first  nine  months of 1999,  financing  activities  provided  cash of $3.3
million  and for the same  period  in 1998  financing  activities  used  cash of
$325,000.  The net  increase  between  periods  in cash  provided  by  financing
activities was $3.6 million. This increase primarily results from $15 million of
proceeds from the senior  subordinated notes and warrants,  offset by repayments
of $8.6 million of short-term borrowings.

Capital  expenditures  amounted  to  $1.1  million  and  $1.9  million  for  the
nine-month  periods  ended  September  30,  1999 and 1998,  respectively.  These
expenditures  upgraded  computer  systems  capabilities  and maintained  Company
facilities in the ordinary  course of business.  As of September  30, 1999,  the
Company had borrowing  available  under its revolving  credit  facility of $14.6
million.

The Company  completed a $15 million  private  placement of senior  subordinated
notes and warrants on January 29, 1999.  Proceeds were used primarily to finance
acquisitions  and  to  reduce  outstanding  short-term  borrowings.  The  senior
subordinated  notes  mature  in 2006  and bear  interest  at the rate of 12% per
annum.  The senior  subordinated  notes were  issued  with  detachable  warrants
subject to a warrant agreement dated January 29, 1999.

Management believes that cash flows from operations,  together with its existing
and  anticipated  borrowing  capacity,  as discussed  above,  are  sufficient to
support the Company's operations and general business and liquidity requirements
for the foreseeable future, including anticipated acquisitions.



<PAGE>


Year 2000 Compliance

         The Company is  continuing  its process of evaluating  its  information
technology infrastructure for Year 2000 compliance.  The Company does not expect
that the cost to modify its  information  technology  infrastructure  to be Year
2000  compliant  will be  material  to its  financial  position  or  results  of
operations.  The Company  does not  anticipate  any material  disruption  in its
operations  as a result of any failure by the Company to be in  compliance.  The
Company is in the process of obtaining  information  concerning  the latest Year
2000 compliance  status of its major suppliers and customers.  In the event that
any of the Company's  significant  suppliers or customers does not  successfully
and timely achieve Year 2000  compliance,  the Company's  business or operations
could be adversely affected.

         The Company  continues to implement its Year 2000  compliance  program.
The following table provides a summary of the Company's  progress in each of the
phases,  estimated  percentage  complete and the anticipated  completion date of
each phase:

<TABLE>


<CAPTION>

------------------------ ---------------------------------------------------------------- -------------- ---------------
                                                                                           Estimated %     Estimated
                                                   Definition                               Complete     Complete Date
         Phase
------------------------ ---------------------------------------------------------------- -------------- ---------------
------------------------ ---------------------------------------------------------------- -------------- ---------------
<S>                      <C>                                                               <C>           <C>
Awareness                Generate awareness of the Y2K issue throughout the               100%
                         organization and establish compliance program.
------------------------ ---------------------------------------------------------------- -------------- ---------------
Inventory                Analyze all relevant hardware/application software/operating     100%
                         systems and networks for compliance
------------------------ ---------------------------------------------------------------- -------------- ---------------
Assessment,              Prioritize hardware and software issues, initiate changes        95%            11/30/99
Conversion               necessary to achieve compliance and test changes made for
Testing and              actual compliance.
Implementation
------------------------ ---------------------------------------------------------------- -------------- ---------------
Imbedded Technology      Determine  whether  equipment with imbedded technology,          100%
                         such as PBX switches, elevators, alarm systems,  etc.
                         are Y2K compliant.  Analysis to date has identified
                         limited exposure in this area.  Analysis of recent
                         acquisitions continues.
------------------------ ---------------------------------------------------------------- -------------- ---------------
Third-Party Interfaces   Determine whether electronic interfaces with third parties are   95%            11/30/99
                         compliant. There are only a few such interfaces that will be
                         fully tested later in the year. If necessary, contingency
                         arrangements will be readily available, as the interfaces are
                         not "real-time".
------------------------ ---------------------------------------------------------------- -------------- ---------------
Third-Party              Determine whether third parties that provide material            98%            11/30/99
Relationships            services/supplies are compliant. Feedback to date indicates
                         that companies with whom we have a material relationship are
                         well advanced in bringing their internal systems into
                         compliance. Less well defined is whether their third parties
                         are in compliance.
------------------------ ---------------------------------------------------------------- -------------- ---------------
                         We will continue to cooperate in the exchange of information     95%            11/30/99
                         with material third parties in an effort to ensure their
                         compliance and/or assess the impact of their non-compliance.
                         Where the risk of  non-compliance  is serious,  we will
                         select alternate vendors.
------------------------ ---------------------------------------------------------------- -------------- ---------------
</TABLE>

         The Company  estimates that the cost of compliance  will not exceed the
initial amount budgeted of $250,000.

         Where practical the Company will develop contingency plans in an effort
to ensure minimal disruption to our clients.

<PAGE>

Inflation

         Inflation  has not had a material  impact on the  Company's  results of
operations for the past three years.


<PAGE>



Item 3 - Quantitative and Qualitative Disclosures about Market Risk.

         CDL's major "market risk"  exposure is the effect of changing  interest
rates.  CDL manages its  interest  expense by using a  combination  of fixed and
variable  rate debt.  At September 30, 1999,  the  Company's  debt  consisted of
approximately  $26 million of fixed rate debt with a weighted  average  interest
rate of 10.0% and $5  million  of  variable  rate debt with a  weighted  average
interest  rate of 7.5% The amount of variable  rate debt  fluctuates  during the
year based on CDL's cash  requirements.  If interest rates on such variable rate
debt were to increase by 75 basis points (one-tenth of the rate at September 30,
1999), the net impact to the Company's  results of operations and cash flows for
the nine months ended  September  30, 1999 would be a decrease of  approximately
$271,000.



<PAGE>


                           Part II - OTHER INFORMATION

Item 1 - Legal Proceedings.

         In February 1996,  Liberty Mutual Insurance Company ("Liberty  Mutual")
filed  an  action  against  Securities  Courier  Corporation  ("Securities"),  a
subsidiary  of the Company,  Mr.  Vincent Brana and certain other parties in the
United States  District  Court for the Southern  District of New York  alleging,
among other things, that Securities Courier had fraudulently obtained automobile
liability  insurance  from  Liberty  Mutual in the late 1980s and early 1990s at
below  market  rates.  This suit,  which  claims  common  law fraud,  fraudulent
inducement,  unjust  enrichment  and  violations of the civil  provisions of the
Federal  RICO  statute,  among  other  things,  seeks an  unspecified  amount of
compensatory  and punitive  damages from the  defendants,  as well as attorneys'
fees and other  expenses.  Three  additional  defendants  were added by way of a
second amended  complaint on April 9, 1998.  Securities and Mr. Brana have filed
cross claims against each of these  additional  defendants and certain  original
defendants  who had acted as  insurance  brokers for certain of the  policies at
issue. Under the terms of its acquisition of Securities Courier, the Company has
certain  rights  to  indemnification  from Mr.  Brana.  In  connection  with the
indemnification,  Mr. Brana has entered into a settlement agreement and executed
a promissory note and security agreement securing up to $500,000 or such greater
amount as may be due for any  defense  costs or award  arising out of this suit.
Mr.  Brana has  delivered  150,000  shares of CDL common stock to the Company as
collateral  security  for the  promissory  note,  which is due for  repayment on
December 1, 2002.

         On April  13,  1999 a  motion  for  summary  judgement  dismissing  the
complaint,  based upon statute of  limitation  defenses,  was filed on behalf of
Securities  and Mr.  Brana.  On November 8, 1999 the Court denied the Motion for
Summary  Judgment  that was filed on behalf of Securities  and Mr.  Brana.  This
matter will now proceed to a jury trial for determination  however, a trial date
has not yet been set by the Court.  The Court  scheduled  a further  hearing for
November 23, 1999 to hear oral arguments of any motions that remain outstanding.
The Company does not believe that an adverse  determination in this matter would
result in a material  adverse effect on the consolidated  financial  position or
results of operations of the Company.

         The Company is, from time to time, a party to litigation arising in the
normal course of its business, most of which involves claims for personal injury
and property  damage  incurred in  connection  with its same-day  ground and air
delivery operations.  Management believes that none of these actions,  including
the  action  described  above,  will  have  a  material  adverse  effect  on the
consolidated financial position or results of operations of the Company.

<PAGE>

Item 6 - Exhibits and Reports on Form 8-K

          (a)  Exhibits

               27.1 Financial Data Schedule (for electronic submission only)

          (b)  Reports of Form 8-K. The  following  current  reports on Form 8-K
               were filed during the third quarter of 1999.

               (i)  Report on Form 8-K/A filed on July 14, 1999  concerning  the
                    Company's  asset  purchase  agreement  with its  subsidiary,
                    Silver Star Express,  Inc. and Metro Parcel  Service,  Inc.,
                    Nathan Spaulding and Kelly M. Spaulding.

               (ii) Report on Form 8-K/A filed on July 14, 1999  concerning  the
                    Company's  asset  purchase  agreement  with its  subsidiary,
                    Clayton/National Courier Systems, Inc. and Westwind Express,
                    Inc.,  Logistics  Delivery Systems,  Inc.,  Fastrak Delivery
                    Systems, Inc., Sierra Delivery Services, Inc., and Steven S.
                    Keihner.

               (iii)Report on Form 8-K/A filed on July 23, 1999  concerning  the
                    Company's   $15   million   private   placement   of  senior
                    subordinated   notes  and  warrants  with  three   financial
                    institutions.



<PAGE>



                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.



Dated:   November 15, 1999             CONSOLIDATED DELIVERY & LOGISTICS, INC.




                                        By: /s/ Russell J. Reardon
                                            Russell J. Reardon
                                            Chief Financial Officer


<PAGE>



                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.



Dated:   November 15, 1999             CONSOLIDATED DELIVERY & LOGISTICS, INC.




                                        By: /s/ Russell J. Reardon
                                            Russell J. Reardon
                                            Chief Financial Officer




<PAGE>



                                  EXHIBIT INDEX


         27.1     Financial Data Schedule (for electronic submission only)