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 March 31, 1998 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
incorporation or organization)             (I.R.S. Employer Identification No.)



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 X  No___

The  number of shares of common  stock of the  Registrant,  par value  $.001 per
share, outstanding as of May 4, 1998 was 6,666,884.


<PAGE>


                     CONSOLIDATED DELIVERY & LOGISTICS, INC.
                 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998

                                      INDEX
                                                                       Page

Part I - Financial Information (unaudited)

  Item 1 - Financial Statements

  Consolidated Delivery & Logistics, Inc. and Subsidiaries
    Condensed Consolidated Balance Sheets as of March 31, 1998, and        3
    December 31, 1997
    Condensed Consolidated Statements of Operations for the Three Months   4
    Ended March 31, 1998 and 1997
    Condensed Consolidated Statements of Cash Flows for the Three Months   5   
    Ended March 31, 1998 and 1997
  Notes to Condensed Consolidated Financial Statements                     6

  Item 2 - Management's Discussion and Analysis of Financial Condition and
     Results of Operations                                                 9

Part II - Other Information

  Item 1 - Legal Proceedings                                              12

  Item 6 - Exhibits and Reports on Form 8-K                               13

Signature                                                                 14



<PAGE>

<TABLE>
<CAPTION>

            CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                     (In thousands except share information)

                                                                    March 31,            December 31, 
                                                                       1998                  1997
                                                                 -----------------    ------------------
                                                                   (Unaudited)            (Note 1)

                            ASSETS

CURRENT ASSETS:
<S>                                                              <C>                  <C>   
  Cash and cash equivalents                                                 $853              $1,812
  Accounts receivable, net                                                18,588              21,275
  Prepaid expenses and other current assets                                2,721               2,992
                                                                 -----------------    ------------------
    Total current assets                                                  22,162              26,079

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net                                  6,144               5,667
OTHER ASSETS                                                               3,998               4,403
NONCURRENT ASSETS OF DISCONTINUED
  OPERATIONS                                                                   -                  10
                                                                 -----------------    ------------------
     Total assets                                                         $32,304             $36,159
                                                                 =================    ==================

             LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Short-term borrowings                                                   $4,353              $7,360
  Current maturities of long-term debt                                     2,501               3,280
  Accounts payable and accrued liabilities                                12,385              12,868
  Net liabilities of discontinued operations                                  88                  52
                                                                 -----------------    ------------------
    Total current liabilities                                             19,327              23,560

LONG-TERM DEBT                                                             2,511               2,240
OTHER LONG-TERM LIABILITIES                                                1,611               1,745
                                                                 -----------------    ------------------
    Total liabilities                                                     23,449              27,545
                                                                 -----------------    ------------------

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; 6,666,884 shares issued and outstanding
   at March 31, 1998 and December 31, 1997                                     7                   7
 Additional paid-in capital                                                9,026               9,026
 Accumulated deficit                                                        (178)               (419)
                                                                 -----------------    ------------------
    Total stockholders' equity                                             8,855               8,614
                                                                 -----------------    ------------------
    Total liabilities and stockholders' equity                           $32,304             $36,159
                                                                 =================    ==================
</TABLE>


                      See accompanying notes to condensed consolidated financial
                                              statements.
<PAGE>
<TABLE>
<CAPTION>

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

                                                                              For the Three Months Ended 
                                                                                      March 31,
                                                                          -----------------------------------
                                                                               1998                1997
                                                                          ---------------     ---------------


<S>                                                                       <C>                 <C>    
Revenue                                                                      $42,686             $40,409

Cost of revenue                                                               33,278              31,068
                                                                          ---------------     ---------------

  Gross profit                                                                 9,408               9,341

Selling, general, and administrative expenses                                  8,823               9,712
                                                                          ---------------     ---------------

  Operating income (loss)                                                        585                (371)

Other (income) expense
  Gain on sale of subsidiary, net                                                  -                (816)
  Interest expense                                                               264                 244
  Other income, net                                                              (80)                (95)
                                                                          ---------------     ---------------

Income from continuing operations before
    income taxes                                                                 401                 296

Provision for income taxes                                                       160                 119
                                                                          ---------------     ---------------

Income from continuing operations                                                241                 177

Loss from discontinued operations, net of tax of $44                               -                 (66)
                                                                          ---------------     ---------------

  Net income                                                                    $241                $111
                                                                          ===============     ===============

Basic and diluted income (loss) per share:
  Continuing operations                                                         $.04                $.03
  Discontinued operations                                                          -                (.01)
                                                                          ---------------     ---------------
  Net income per share                                                          $.04                $.02
                                                                          ===============     ===============

Basic weighted average common shares outstanding                               6,667               6,706
                                                                          ===============     ===============
 
Diluted weighted average common shares outstanding                             6,783               6,706
                                                                          ===============     ===============
</TABLE>
                                                                         


                      See accompanying notes to condensed consolidated financial
                                             statements.


<PAGE>

<TABLE>
<CAPTION>

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

                                                                               For the Three Months Ended
                                                                                        March 31,
                                                                             --------------------------------
                                                                                 1998              1997
                                                                             --------------    --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                          <C>               <C> 
Net income                                                                          $241              $111
Adjustments to reconcile net income to net cash provided by
  operating activities -
    Gain on disposal of equipment and leasehold improvements                           -                (6)
    Gain on sale of subsidiary                                                         -              (816)
    Depreciation and amortization                                                    614               360
    Changes in operating assets and liabilities
      (Increase) decrease in -
        Accounts receivable, net                                                   2,686               911
        Prepaid expenses and other current assets                                    271              (719)
        Other assets                                                                 211              (282)
      Increase (decrease) in -
        Accounts payable and accrued liabilities                                    (483)              857
        Other long-term liabilities                                                 (134)              306
                                                                             --------------    --------------
          Net cash provided by operating activities                                3,406               722
                                                                             --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equipment and leasehold improvements                           -                22
  Additions to equipment and leasehold improvements                               (1,033)             (274)
                                                                             --------------    --------------
          Net cash used in investing activities                                   (1,033)             (252)
                                                                             --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Short-term borrowings (repayments), net                                         (3,007)            1,050
  Repayments of long-term debt                                                      (371)             (232)
                                                                             --------------    --------------
          Net cash (used in) provided by  financing activities                    (3,378)              818
                                                                             --------------    --------------

CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS                                    46              (180)
                                                                             --------------    --------------

          Net (decrease) increase in cash and cash equivalents                      (959)            1,108

CASH AND CASH EQUIVALENTS, beginning of period                                     1,812             1,757
                                                                             --------------    --------------

CASH AND CASH EQUIVALENTS, end of period                                            $853             2,865
                                                                             ==============    ==============
</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, 1997 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 month period ended March 31,
         1998 are not necessarily indicative of the results that may be expected
         for any other interim period or for the year ending  December 31, 1998.
         Certain  reclassifications  have been  made to prior  year  amounts  to
         conform with the current  presentation,  including the reclassification
         of the Company's fulfillment and direct mail business as a discontinued
         operation  (see  Note  3).  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, 1997.

(2)       SHORT-TERM BORROWINGS:

         Under the terms of its July 14, 1997  Revolving  Credit  Facility  with
         First Union Commercial Corporation (the "Bank"), the Company was not in
         compliance with one of its loan covenants as of and for the three month
         period  ended  March  31,  1998.  The Bank has  issued a waiver  to the
         Company with respect to such  non-compliance for the three month period
         ended March 31,  1998.  The Company  intends to  negotiate  appropriate
         changes in such loan covenant.


(3)      DISCONTINUED OPERATIONS:

         In October 1997,  the Company  announced its intention to pursue a plan
         to dispose of its fulfillment and direct mail business. On December 31,
         1997, the Company  entered into an agreement  providing for the sale of
         certain   assets  of  its   fulfillment   and  direct  mail   business.
         Accordingly,  the  financial  position  and  operating  results  of the
         Company's  fulfillment  and direct mail business  have been  segregated
         from continuing operations and reclassified as a discontinued operation
         in the accompanying condensed consolidated financial statements.

         Results from the discontinued fulfillment and direct mail business were
         as follows (in thousands):
<TABLE>
<CAPTION>

                                                                      Three Months Ended
                                                                           March 31,
                                                               ---------------------------------
                                                                    1998              1997
                                                               ---------------    --------------
                                       
         <S>                                                   <C>                <C>   
         Revenue                                                    $      -           $1,326
                                                               ===============    ==============

</TABLE>


         The net assets  (liabilities) of discontinued  operations are comprised
         of the following (in thousands):
<TABLE>
<CAPTION>
                                                                 March 31,              December 31,
                                                                    1998                    1997
                                                            ---------------------    --------------------

         <S>                                                <C>                      <C>   
         Current assets                                               $145                  $3,829
         Current liabilities                                          (233)                 (3,881)
                                                            ---------------------    --------------------
          Net current liabilities                                      (88)                    (52)
         Equipment and leasehold improvements                            -                      10
                                                            ---------------------    --------------------
         Net liabilities of discontinued operations                   ($88)                   ($42)
                                                            =====================    ====================
</TABLE>
<PAGE>


(4)      LITIGATION:

         On March 19,  1997,  a  purported  class  action  complaint,  captioned
         Gapszewicz v. Consolidated Delivery & Logistics,  Inc., et al. (97 Civ.
         1939),  was filed in the United States  District Court for the Southern
         District of New York (the "Court") against the Company,  certain of the
         Company's  present and former executive  officers,  and the co-managing
         underwriters of the Company's initial public offering (the "Offering").
         The  gravamen  of the  complaint  is that  the  Company's  registration
         statement  for the Offering  contained  misstatements  and omissions of
         material fact in violation of the federal  securities laws and that the
         Company's financial  statements included in the registration  statement
         were false and misleading and did not fairly reflect the Company's true
         financial  condition.  The complaint seeks the certification of a class
         consisting of  purchasers  of the Company's  Common Stock from November
         21,  1995  through  February  27,  1997,  rescission  of the  Offering,
         attorneys' fees and other damages. In April 1997, five other complaints
         containing allegations identical to the Gapszewicz complaint were filed
         in the same federal court against the Company.  On May 27, 1997,  these
         six complaints were  consolidated  into a single action entitled "In re
         Consolidated Delivery & Logistics, Inc. Securities Litigation". On July
         16, 1997, the Company and the underwriter  defendants filed a motion to
         dismiss the complaint.  In response,  the  plaintiffs  filed an amended
         complaint  on  October  20,  1997.  A motion  to  dismiss  the  amended
         complaint  was filed by the Company and the  underwriter  defendants on
         December 15, 1997. No ruling on the Company's  motion has been rendered
         by the Court.  The Company  believes the  allegations  contained in the
         amended  complaint  are  without  merit  and  intends  to  continue  to
         vigorously defend the action.

         The  Company  and its  subsidiaries  are from time to time,  parties to
         litigation  arising in the  normal  course of their  business,  most of
         which involves  claims for personal injury and property damage incurred
         in connection with their operations.  Management  believes that none of
         these actions, including the above action, will have a material adverse
         effect on the  financial  position  or  results  of  operations  of the
         Company and its subsidiaries.


(5)      INCOME (LOSS) PER SHARE:

         The Company adopted the provisions of Statement of Financial Accounting
         Standards No. 128,  "Earnings  Per Share" ("SFAS 128"),  in the quarter
         ended December 31, 1997. SFAS 128 establishes  standards for the method
         of  computation,  presentation  and  disclosure  for earnings per share
         ("EPS")  and  requires  the  presentation  of basic  and  diluted  EPS.
         Previously  reported  EPS amounts  were not affected by the adoption of
         this new standard.  There were no differences between basic and diluted
         EPS for the three months ended March 31, 1998 and 1997.  The conversion
         of the debentures into common stock (see Note 6) were  antidilutive for
         1998 and 1997. The dilutive amount of stock options was not significant
         for 1998 and the conversion of the stock options were  antidilutive for
         1997.

         A  reconciliation  of weighted  average  common shares  outstanding  to
         weighted average common shares outstanding assuming dilution follows:
<TABLE>
<CAPTION>
                                                                   Three Months Ended March 31,
                                                                --------------- ----- --------------
                                                                     1998                 1997
                                                                ---------------       --------------
         <S>                                                    <C>                   <C>  
         Basic weighted average common
          shares oustanding                                         6,666,884            6,705,822
         Effect of dilutive securities:
          Stock options                                               115,832                    -
                                                                ---------------       --------------
         Diluted weighted average common
             shares outstanding                                     6,782,716            6,705,822
                                                                ===============       ==============
</TABLE>
<PAGE>

(6)      SUBSEQUENT EVENT:

         On April 1, 1998 the Company converted $740,000 of the $2 million of 8%
         Subordinated  Convertible  Debentures  (the  " 8%  Debentures")  to 10%
         Subordinated  Convertible  Debentures (the "10% Debentures") and issued
         $150,000  of  additional  10%   Debentures.   The  10%  Debentures  are
         convertible  into common stock of the Company at a conversion  price of
         $5.50 per  share,  accrue  interest  at 10% per annum  which is payable
         quarterly,  mature on August 21, 2000 and extend the initial  repayment
         date by one year from August 1998 to August  1999.  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,  1999,  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,  1999.  As a result of the above  transaction,  $740,000  of the $2
         million of 8% Debentures has been  classified as long-term debt and the
         remainder,  payable  in August  1998,  has been  classified  as current
         maturities of long-term debt in the accompanying condensed consolidated
         balance sheet as of March 31, 1998.

(7)      NEW ACCOUNTING PRONOUNCEMENTS:

         The  Financial  Accounting  Standards  Board has  issued  Statement  of
         Financial Accounting Standards No. 131,  "Disclosures About Segments of
         an  Enterprise  and  Related   Information"   ("SFAS  131").  SFAS  131
         introduces a new model for segment  reporting,  called the  "management
         approach." The management  approach is based on the way that management
         organizes segments within a company for making operating  decisions and
         assessing  performance.  Reportable  segments are based on products and
         services, geography, legal structure, management structure - any manner
         in which management  disaggregates a company.  The management  approach
         replaces  the notion of  industry  and  geographic  segments in current
         accounting standards.  SFAS 131 is effective for fiscal years beginning
         after December 15, 1997 and early adoption is encouraged. However, SFAS
         131 need not be applied to interim  statements  in the initial  year of
         application.   SFAS  131  requires  restatement  of  all  prior  period
         information  reported.  The Company intends to adopt this standard when
         required and is in the process of determining the effect of SFAS 131 on
         the Company's consolidated financial statements.

         In March 1998,  the  Accounting  Standards  Executive  Committee of the
         American  Institute of Certified Public Accountants issued Statement of
         Position 98-1, "Accounting for the Costs of Computer Software Developed
         or Obtained for Internal  Use." The  statement is intended to eliminate
         the diversity in practice in accounting for internal-use software costs
         and improve financial reporting.  The statement is effective for fiscal
         years  beginning after December 15, 1998. The Company is in the process
         of   determining   the  effect  of  this  statement  on  the  Company's
         consolidated financial position and results of operations.
<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 appearing elsewhere herein.

Disclosure Regarding Forward-Looking Statements

         The Private  Securities  Litigation Reform Act of 1995 provides a "safe
harbor" for forward looking statements.  Certain  information  contained in this
Form 10-Q includes  information that is forward  looking,  such as the Company's
expectations for future performance,  its growth and acquisition strategies, its
anticipated  liquidity and capital needs and its future  prospects.  The matters
referred to in such forward  looking  statements  could be affected by the risks
and  uncertainties  related to the Company's  business.  Actual results may vary
from these  forward-looking  statements  due to many factors  including  but not
limited to: lack of satisfactory  acquisition  candidates and/or an inability to
conclude acquisitions on satisfactory terms;  acquisition  limitations under the
terms of the existing credit facility; inability to obtain acquisition financing
on satisfactory  terms;  inability to negotiate and obtain waivers of default or
acceptable  revisions to loan covenants with the Company's  primary lender under
the existing credit facility; the effect of economic and market conditions,  the
ability of the Company to execute its strategic  plan, the impact of competition
and the Company's reported results varying materially from management's  current
expectations.  Investors  are further  cautioned  that the  Company's  financial
results can vary from quarter to quarter, and the financial results reported for
the first quarter may not necessarily be indicative of future results.  For more
information about the Company, please review the Company's most recent Form 10-K
filed with the Securities and Exchange Commission.

Results of Operations

Revenue for the first  quarter of 1998  increased  by $2.3  million,  or 5.7% to
$42.7 million from $40.4  million for the first quarter of 1997.  Revenue in the
Company's ground delivery divisions contributed to the increase primarily due to
newly  added  customers  combined  with an  expansion  of routes  with  existing
customers in the contract  distribution  business in the Northeast and Southeast
regions.  Air courier revenue remained  unchanged at $13.4 million for the first
three months of 1998 and 1997.

Cost of revenue  increased by $2.2  million,  or 7.1%,  to $33.3 million for the
first three  months of 1998 from $31.1  million  for the first  three  months of
1997.  The increase in revenue from  contract  distribution  business  described
above typically  produces higher initial costs,  which caused a greater increase
in cost of revenues  (7.1%) when  compared  to the  increase in revenue  (5.7%).
These  costs  tend to lower as  additional  volume  or new  contracts  are added
thereby increasing route density.

Selling,  general and administrative expenses decreased by $900,000, or 9.3%, to
$8.8  million  from $9.7  million for the first  three  months of 1998 and 1997,
respectively.  The Company's ground delivery division contributed  approximately
$579,000 and the air delivery division  $321,000 of the decrease  reflecting the
Company's continuing policy of consolidation and cost reduction.

As a result of the  matters  discussed  above,  operating  income  increased  by
$956,000 to operating  income of $585,000  from a loss of $371,000 for the first
three months of 1998 and 1997, respectively.


Income from continuing  operations before income taxes increased by $105,000, or
35.5%,  to  $401,000  for the first  quarter of 1998 from  $296,000 in the first
quarter of 1997.  Income from continuing  operations before income taxes for the
first quarter of 1997 included a gain of $816,000  recognized on the disposition
of the Company's contract logistics subsidiary.


Liquidity and Capital Resources

Working capital increased by $300,000 to $2.8 million at March 31, 1998 from
$2.5  million at December  31,  1997.  Cash and cash  equivalents  decreased  by
$959,000 to $853,000 at March 31, 1998 from $1.8  million at December  31, 1997.
The  decrease in cash is  primarily  due to a reduction  in Company debt of $3.4
million and acquisition of equipment and leasehold improvements in the amount of
$1.0  million,  which is offset by cash  provided by Company  operations of $3.4
million.

As  described in Note 2 of the  accompanying  condensed  consolidated  financial
statements,  the Company was not in compliance with one of its loan covenants as
of and for the three month period ended March 31, 1998. The Company has obtained
a waiver  from the  lending  institution  for such  non-compliance.  The Company
intends to negotiate appropriate changes in such loan covenant.

Capital expenditures amounted to $1.0 million and $274,000 for the first quarter
of 1998 and 1997, respectively.

Effective  April 1, 1998 the  Company  converted  $740,000  of its $2 million 8%
Subordinated  Convertible Debentures to 10% Subordinated  Convertible Debentures
and  issued  an  additional   $150,000  of  the  10%  Subordinated   Convertible
Debentures.  Pursuant to an agreement  with the  Company's  lender,  First Union
National Bank, the conversion  will not affect  availability  under the terms of
the Company's  credit  facility.  At March 31, 1998 the Company had $4.8 million
available under its credit facility.

Discussions are underway with the Company's primary lender to provide additional
financing  to fund the  Company's  anticipated  acquisition  program  for  which
negotiations are currently being conducted with several acquisition candidates.

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

Recently Issued Accounting Pronouncements

The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Accounting  Standards No. 131,  "Disclosures About Segments of an Enterprise and
Related  Information"  ("SFAS 131"). SFAS 131 introduces a new model for segment
reporting, called the "management approach." The management approach is based on
the way that management organizes segments within a company for making operating
decisions and assessing  performance.  Reportable segments are based on products
and services,  geography, legal structure,  management structure - any manner in
which management  disaggregates a company.  The management approach replaces the
notion of industry and geographic segments in current accounting standards. SFAS
131 is effective for fiscal years  beginning  after  December 15, 1997 and early
adoption  is  encouraged.  However,  SFAS  131 need not be  applied  to  interim
statements in the initial year of application.  SFAS 131 requires restatement of
all prior  period  information  reported.  The  Company  intends  to adopt  this
standard when required and is in the process of  determining  the effect of SFAS
131 on the Company's consolidated financial statements.

In March,  1998, the Accounting  Standards  Executive  Committee of the American
Institute of Certified  Public  Accountants  issued  Statement of Position 98-1,
"Accounting  for the  Costs of  Computer  Software  Developed  or  Obtained  for
Internal  Use." The statement is intended to eliminate the diversity in practice
in accounting for internal-use  software costs and improve financial  reporting.
The statement is effective for fiscal years  beginning  after December 15, 1998.
The Company is in the process of determining the effect of this statement on the
Company's consolidated financial position and results of operations.

Year 2000 Compliance

         The Company is currently in the process of evaluating  its  information
technology  infrastructure  for the 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 Year 2000
compliance  status of its 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.

Inflation

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


<PAGE>


                           Part II - OTHER INFORMATION

Item 1 - Legal Proceedings.

         On March 19,  1997,  a  purported  class  action  complaint,  captioned
Gapszewicz v.  Consolidated  Delivery & Logistics,  Inc., et al. (97 Civ. 1939),
was filed in the United States  District Court for the Southern  District of New
York (the "Court")  against the Company,  certain of the  Company's  present and
former  executive  officers,  and the co-managing  underwriters of the Company's
initial public offering (the "Offering").  The gravamen of the complaint is that
the Company's  registration  statement for the Offering contained  misstatements
and omissions of material fact in violation of the federal  securities  laws and
that the Company's financial  statements included in the registration  statement
were  false  and  misleading  and did not  fairly  reflect  the  Company's  true
financial condition. The complaint seeks the certification of a class consisting
of  purchasers  of the  Company's  Common  Stock from  November 21, 1995 through
February  27,  1997,  rescission  of the  Offering,  attorneys'  fees and  other
damages. In April 1997, five other complaints  containing  allegations identical
to the  Gapszewicz  complaint  were filed in the same federal  court against the
Company.  On May 27, 1997, these six complaints were  consolidated into a single
action  entitled  "In re  Consolidated  Delivery &  Logistics,  Inc.  Securities
Litigation".  On July 16, 1997, the Company and the underwriter defendants filed
a motion to dismiss the complaint.  In response, the plaintiffs filed an amended
complaint  on October 20, 1997.  A motion to dismiss the amended  complaint  was
filed by the Company and the  underwriter  defendants  on December 15, 1997.  No
ruling on the  Company's  motion has been  rendered  by the Court.  The  Company
believes the  allegations  contained in the amended  complaint are without merit
and intends to continue to vigorously defend the action.

         In February 1996,  Liberty Mutual Insurance Company ("Liberty  Mutual")
filed an action  against  Securities  Courier  Corporation,  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.
Under the terms of its  acquisition  of  Securities  Courier,  the  Company  has
certain rights to indemnification from Mr. Brana. Discovery is currently pending
and as a result the Company is unable to make a  determination  as to the merits
of the claim. The Company does not believe that an adverse determination in this
matter would result in a material adverse affect 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  actions  described  above,  will  have a  material  adverse  effect  on the
consolidated financial position or results of operations of the Company.


Item 6 - Exhibits and Reports on Form 8-K

         (a)      Exhibit

                  27.1     Financial Data Schedule (for electronic submission
                             only)

         (b)      Report on Form 8-K filed on January  15, 1998  concerning  the
                  Company's  sale  of  certain   assets  of  Sureway   Logistics
                  Corporation, its subisidiary, to Mimatar Corporation.


<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: May 20, 1998           CONSOLIDATED DELIVERY & LOGISTICS, INC.





                                        By:  /s/ Joseph G. Wojak
                                             Joseph G. Wojak
                                             Executive Vice President, Chief
                                             Financial Officer, Treasurer
                                               and Secretary
                                             (PRINCIPAL FINANCIAL AND
                                              ACCOUNTING OFFICER)