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, 1997 or
                        ------------------

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


Commission File Number:    0-26954


                   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 October 11, 1997, was 6,666,884.


<PAGE>



                  CONSOLIDATED DELIVERY & LOGISTICS, INC.
               FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997

                                   INDEX


<TABLE>
<S>                                                                                           <C>

                                                                                              Page


Part I - Financial Information (unaudited)

         Item 1 - Financial Statements

              Consolidated Delivery & Logistics, Inc. and Subsidiaries
                  Condensed Consolidated Balance Sheets as of December 31, 1996 and
                           September 30, 1997                                                    3
                  Condensed Consolidated Statements of Income for the Three and Nine Months
                           Ended September 30, 1996 and 1997                                     4
                  Condensed Consolidated Statements of Cash Flows for the Nine Months
                           Ended September 30, 1996 and 1997                                     5
                  Notes to Condensed Consolidated Financial Statements                           6

         Item 2 - Management's Discussion and Analysis of Financial Condition and
                           Results of Operations                                                10

Part II - Other Information

         Item 1 - Legal Proceedings                                                             14

         Item 6 - Exhibits and Reports on Form 8-K                                              14

         Signature                                                                              15
</TABLE>



<PAGE>



          CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                   (In thousands except share information)
<TABLE>
<S>                                                              <C>                   <C>    

                                                                     December              September
                                                                     31, 1996              30, 1997
                                                                 ------------------    ------------------
                                                                     (Note 1)             (Unaudited)

                            ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                               $1,757               $1,270
  Accounts receivable, net                                                21,018               22,348
  Prepaid expenses and other current assets                                2,330                2,819
  Net assets of discontinued operations                                    1,801                1,989
                                                                 ------------------    ------------------
    Total current assets                                                  26,906               28,426

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net                                  3,857                5,949
OTHER ASSETS                                                               4,238                4,000
                                                                 ==================    ==================
    Total assets                                                         $35,001              $38,375
                                                                 ==================    ==================

             LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Short-term borrowings                                                   $7,200               $6,893
  Current maturities of long-term debt                                     1,152                3,071
  Accounts payable and accrued liabilities                                12,546               14,977
                                                                 ------------------    ------------------
    Total current liabilities                                             20,898               24,941

LONG-TERM DEBT                                                             3,415                2,871
OTHER LONG-TERM LIABILITIES                                                1,958                2,051
                                                                 ------------------    ------------------
    Total liabilities                                                     26,271               29,863
                                                                 ------------------    ------------------

STOCKHOLDERS' EQUITY
 Preferred stock, $.001 par value; 2,000,000 shares
   authorized; no shares issued and outstanding                               0                     0
 Common stock, $.001 par value; 30,000,000 shares
   authorized; 6,795,790 and 6,658,551 shares issued
   and outstanding at December 31, 1996 and
   September 30, 1997, respectively                                            7                    7
 Additional paid-in capital                                                9,601                9,001
 Accumulated deficit                                                        (878)                (496)
                                                                 ------------------    ------------------
    Total Stockholders' Equity                                             8,730                8,512
                                                                 ==================    ==================
    Total Liabilities and Stockholders' Equity                           $35,001              $38,375
                                                                 ==================    ==================
</TABLE>



    See accompanying notes to condensed consolidated financial statements.


          CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share data)
                                 (Unaudited)
<TABLE>
<S>                                          <C>                 <C>                  <C>                 <C>   

                                                 For The Three Months Ended                For The Nine Months Ended
                                                        September 30,                            September 30,
                                             ------------------------------------     ------------------------------------
                                                  1996                1997                 1996                1997
                                             ----------------    ----------------     ----------------    ----------------


REVENUES                                        $42,911             $44,259             $120,493            $126,368

Cost of Revenues                                 31,420              33,810               89,168              96,758
                                             ----------------    ----------------     ----------------    ----------------

          GROSS PROFIT                           11,491              10,449               31,325              29,610

Selling, General, &
   Administrative Expenses                       10,645               9,435               29,615              28,409
                                             ----------------    ----------------     ----------------    ----------------

          OPERATING INCOME                          846               1,014                1,710               1,201

OTHER (INCOME) EXPENSE:
  Gain on Sale of Subsidiary, net                     -                   -                    -                (816)
  Other expense (income), net                       (17)                  5                 (254)               (209)
  Interest expense                                  190                 318                  597                 836
                                             ----------------    ----------------     ----------------    ----------------

INCOME FROM CONTINUING
  OPERATIONS BEFORE INCOME
  TAXES                                             673                 691                1,367               1,390

Provision for Income Taxes                          285                 277                  581                 556
                                             ----------------    ----------------     ----------------    ----------------

INCOME FROM CONTINUING
  OPERATIONS                                        388                 414                  786                 834

INCOME (LOSS) FROM
  DISCONTINUED OPERATIONS,
  NET OF TAX                                         61                (361)                 218                (452)
                                             ----------------    ----------------     ----------------    ----------------

          NET INCOME                               $449                 $53               $1,004                $382
                                             ================    ================     ================    ================

INCOME (LOSS) PER SHARE
  Continuing operations                           $0.06               $0.06                $0.12               $0.13
  Discontinued operations                          0.01               (0.05)                0.03               (0.07)
                                             ----------------    ----------------     ----------------    ----------------
  Net income per share                            $0.07               $0.01                $0.15               $0.06
                                             ================    ================     ================    ================

AVERAGE SHARES OUTSTANDING USED TO
CALCULATE INCOME (LOSS) PER SHARE
                                                  6,680               6,659                6,649               6,674
                                             ================    ================     ================    ================
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

          CONSOLIDATED DELIVERY & LOGISTICS, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (In thousands)
                                 (Unaudited)
<TABLE>
<S>                                                                           <C>               <C>
                                                                                Nine Months      Nine Months Ended
                                                                              Ended September   September 30, 1997
                                                                                 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
----------------------------------------------------------------------------
Net income                                                                        $1,004               $382
----------------------------------------------------------------------------
Adjustments to reconcile net income to net cash provided by
       (used in) operating activities -
----------------------------------------------------------------------------
    Gain on disposal of equipment and leasehold improvements                          (5)               (14)
----------------------------------------------------------------------------
    Gain on sale of subsidiary                                                         -               (816)
----------------------------------------------------------------------------
    Depreciation and amortization                                                  1,078              1,550
----------------------------------------------------------------------------
    Changes in operating assets and liabilities
----------------------------------------------------------------------------
      (Increase) decrease in -
----------------------------------------------------------------------------
        Accounts receivable, net                                                  (1,735)            (1,961)
----------------------------------------------------------------------------
        Prepaid expenses and other current assets                                 (1,595)              (587)
----------------------------------------------------------------------------
        Other assets                                                                 387               (249)
----------------------------------------------------------------------------
      Increase (decrease) in -
----------------------------------------------------------------------------
        Accounts payable and accrued liabilities                                  (2,521)             3,429
----------------------------------------------------------------------------
        Other long-term liabilities                                                  122                 93
----------------------------------------------------------------------------  ---------------   ------------------
          Net cash provided by (used in) continuing operations                    (3,265)             1,827
----------------------------------------------------------------------------
          Net cash used by discontinued operations                                  (477)              (188)
----------------------------------------------------------------------------  ---------------   ------------------
          Net cash provided by (used in) operating activities                     (3,742)             1,639
----------------------------------------------------------------------------  ---------------   ------------------

----------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
----------------------------------------------------------------------------
  Additions to equipment and leasehold improvements                               (1,039)              (808)
----------------------------------------------------------------------------
  Proceeds from sale of equipment and leasehold improvements                          61                 30
----------------------------------------------------------------------------
  Purchases of businesses                                                         (1,616)                 -
----------------------------------------------------------------------------  ---------------   ------------------
          Net cash used in investing activities                                   (2,594)              (778)
----------------------------------------------------------------------------  ---------------   ------------------

----------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
----------------------------------------------------------------------------
  Short-term borrowings (repayments), net                                          3,683               (307)
----------------------------------------------------------------------------
  Proceeds from long-term debt                                                       555                  -
----------------------------------------------------------------------------
  Repayments of long-term debt                                                    (2,978)              (916)
----------------------------------------------------------------------------
  Issuance of common stock in connection with
---------------------------------------------------------------------------          603                  -
          purchases of businesses
----------------------------------------------------------------------------
  Deferred financing costs                                                          (145)              (125)
----------------------------------------------------------------------------  ---------------   ------------------
          Net cash provided by (used in) financing activities                      1,718             (1,348)
----------------------------------------------------------------------------  ---------------   ------------------

----------------------------------------------------------------------------
          Net decrease in cash and cash equivalents                               (4,618)              (487)
----------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, beginning of period                                     7,160              1,757
----------------------------------------------------------------------------  ---------------   ------------------
CASH AND CASH EQUIVALENTS, end of period                                          $2,542             $1,270
----------------------------------------------------------------------------  ===============   ==================

</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,  1996,  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,  1997,  are  not  necessarily
         indicative  of the results that may be expected  for any other  interim
         period   or  for  the  year   ending   December   31,   1997.   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  5).  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, 1996.




(2)      REVOLVING CREDIT FACILITY:

                  On July 14, 1997, the Company entered into a Loan and Security
         Agreement  (the "First Union  Agreement")  with First Union  Commercial
         Corporation  ("First Union") to establish a revolving  credit facility.
         Credit  availability  is based on  certain  criteria,  up to a  maximum
         amount of $15.0  million  and is  secured by  substantially  all of the
         assets,   including  accounts  receivable,   of  the  Company  and  its
         subsidiaries.  Interest  rates on borrowings  are based on margins over
         First Union's  lending  rates or the London  interbank  borrowing  rate
         (Libor).   The  First  Union  Agreement  contains  certain  restrictive
         covenants  for which the Company is in  compliance  as of September 30,
         1997. The First Union Agreement expires on July 30, 1999.




(3)      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  against  the  Company,  certain of the
         Company's  present and former executive  officers,  and the co-managing
         underwriters  (the  "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 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.
         Several additional  purported class actions against the same defendants
         containing  allegations  substantially  similar  to  those  made in the
         Gapszewicz   action  were  also  filed.   All  these  cases  have  been
         consolidated  and a motion to dismiss  was filed by the Company and the
         Underwriters on June 16, 1997.

                  An amended  complaint in the  Gapszewicz  action was served on
         the Company on October 20, 1997. The amended complaint restates many of
         the  allegations  in the original  complaint  and  contains  additional
         alleged  omissions of material fact in both the Company's  registration
         statement  for the Offering and in the  Company's  1996  quarterly  and
         annual filings with the Securities and Exchange Commission. The Company
         believes that the  allegations  contained in the amended  complaint are
         without  merit and the Company  intends to file a new motion to dismiss
         the amended complaint.

                  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  actions,  will  have a  material
         adverse  effect on the  financial  position or results of operations of
         the Company and its subsidiaries.

(4)      EARNINGS PER SHARE:

                  The computation of net income per share for the three and nine
         months  ended  September  30, 1997 and 1996,  is based upon  6,659,000,
         6,680,000,  6,674,000,  and 6,649,000 shares,  respectively,  of Common
         Stock  outstanding.  The  conversion  of stock  options and  debentures
         outstanding are not included in the computations as the effect would be
         antidilutive.

                  The  Financial  Accounting  Standards  Board has  issued a new
         standard,   Statement  of  Financial   Accounting  Standards  No.  128,
         "Earnings Per Share" ("SFAS 128").  SFAS 128 establishes  standards for
         computing and  presenting  earnings per share.  SFAS 128 simplifies the
         standards  for  computing  earnings per share  previously  found in APB
         Opinion No. 15,  "Earnings  Per Share,"  and makes them  comparable  to
         international   earnings   per  share   standards.   It  replaces   the
         presentation of primary earnings per share with a presentation of basic
         earnings per share.  It also  requires dual  presentation  of basic and
         diluted  earnings per share on the face of the income statement for all
         entities with complex capital  structures and requires a reconciliation
         of the  numerator  and  denominator  of the  basic  earnings  per share
         computation to the numerator and  denominator  of the diluted  earnings
         per share  computation.  The Company is required to adopt this standard
         as of December 15, 1997 and early adoption is not  permitted.  SFAS 128
         requires   restatement   of  all  prior   period   earnings  per  share
         calculations presented. The Company intends to adopt this standard when
         required  and has  determined  that  adoption  of SFAS 128 will have no
         effect on earnings per share.

(5)      DISCONTINUED OPERATIONS:

                  On October 27, 1997,  the Company  announced  its intention to
         pursue a plan to dispose of its  fulfillment  and direct mail business.
         The condensed  consolidated  financial statements have been restated to
         reflect  the  fulfillment  and direct mail  business as a  discontinued
         operation.

         Results from discontinued fulfillment  and direct mail  operations were
         as follows:
<TABLE>
           <S>                                              <C>            <C>           <C>           <C> 
                                                               Three Months Ended           Nine Months Ended
                                                             9/30/96        9/30/97       9/30/96      9/30/97
                                                            -----------    ----------    ----------    ---------

           Revenues                                             $2,186        $1,526        $6,298       $4,860
                                                            ===========    ==========    ==========    =========

           Income      (loss)      from       discontinued
           operations   (net  of  income   tax   provision
           (benefit)  of $40 and $146 in 1996  and  ($241)
           and ($301) in 1997)                                 $    61        ($361)        $  218       ($452)
                                                            ===========    ==========    ==========    =========
</TABLE>


                  The net assets of the discontinued operations are reflected in
         "Net Assets of Discontinued  Operations" in the Condensed  Consolidated
         Balance Sheets. The components are as follows:

<TABLE>
           <S>                                                   <C>                   <C>
                                                                    December 31,          September 30,
                                                                        1996                  1997
                                                                 ------------------    ------------------

           Current assets                                             $4,124                 $5,247
           Current liabilities                                        (2,859)                (3,983)
                                                                 ------------------    ------------------
              Net current assets                                       1,265                  1,264
           Equipment and leasehold improvements                          459                    592
           Other non-current assets                                       77                    133
                                                                 ------------------    ------------------
           Net Assets of Discontinued Operations                      $1,801                 $1,989
                                                                 ==================    ==================
</TABLE>



(6)      NEW ACCOUNTING PRONOUNCEMENTS:

                  The Financial  Accounting  Standards  Board has issued two new
         statements,  Statements of Financial  Accounting Standards Numbers 130,
         "Reporting  Comprehensive  Income" (SFAS 130"),  and 131,  "Disclosures
         About Segments of an Enterprise and Related Information" (SFAS 131").

                  SFAS 130  establishes  standards for reporting and  displaying
         comprehensive  income  and  its  components  in a full  set of  general
         purpose financial statements.  The objective of SFAS 130 is to report a
         measure of all  changes in equity of an  enterprise  that  result  from
         transactions  and  other  economic  events  of the  period  other  than
         transactions with owners ("comprehensive income"). Comprehensive income
         is the total of net  income and all other  nonowner  changes in equity.
         SFAS 130 is effective  for fiscal years  beginning  after  December 15,
         1997, with earlier application allowed but not required. Upon adoption,
         reclassification of comparative financial statements provided for prior
         periods is required.  The Company  intends to adopt this  standard when
         required and is in the process of determining the effect of SFAS 130 on
         the Company's financial statement presentation.

                  SFAS 131 introduces a new model for segment reporting,  called
         the "management  approach." The management approach is based on the way
         that the chief  operating  decision maker  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 FASB 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
         financial statements.




<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:  the timing  and terms of any sale of the  discontinued  operation,
unexpected  expenses  that  may be  incurred  therewith;  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;  the effect of economic and market  conditions,  the Company's
limited operating  history,  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 CDLI's  financial  results can vary from quarter to quarter,  and
the  financial  results  reported for the third quarter may not  necessarily  be
indicative of future results. For more information about CDLI, please review the
Company's  most  recent  Form  10-K  filed  with  the  Securities  and  Exchange
Commission.


Results of Operations For The Nine Months Ended September 30, 1997 Compared
to The Nine Months Ended September 30, 1996

         Revenues of $126.4 million for the nine months ended September 30, 1997
represent  a 4.9%  increase  from  $120.5  million  for the same period in 1996.
Several  factors  affected the  Company's  revenues for the nine months of 1997,
among which was the  company's  sale of it's  contract  logistics  subsidiary in
January  1997,  which had  accounted  for $3.8 million in revenues for the first
nine  months  of 1996  but only  $400,000  in 1997.  Additionally,  the  Company
announced on October 27, 1997 that it intends to dispose of its  fulfillment and
direct mail  business.  As a result of this  decision,  the revenues,  costs and
expenses,  assets and  liabilities,  and cash flows relating to this  particular
business have been  reclassified as discontinued  operations in the accompanying
financial statements.

         Air courier revenues  increased $3.8 million  (10.0%),  ground delivery
revenues increased $7.0 million (9.3%) and continuing  logistics  revenues,
representing  ground based  distribution  services declined $4.9 million (66.1%)
for the first nine  months of 1997 when  compared  to the first  nine  months of
1996. Of the decline in  continuing  logistics  revenues of $4.9  million,  $3.4
million represented the sale of the Company's contract logistics subsidiary.
         Air courier revenues increased from the first three quarters of 1996 to
1997 primarily due to internal  growth from existing  accounts.  Ground delivery
revenues increased due to the addition of time service and facilities management
revenues through previously  disclosed  acquisitions  adding $4.5 million of the
revenue  increase  for nine months of 1997 over 1996 as well as the  addition of
several  new  contract  distribution  routes in the  pharmaceutical,  electronic
repair and office product industries.  This increase was offset by a decrease of
$1.8 million in the Company's banking division.  Due to the consolidation taking
place in the banking  industry,  two of the Company's  largest  customers in the
banking  division  merged,  thereby  decreasing the branch network and number of
stops required.

         Cost of  revenues  increased  by $7.6  million  or 8.5% for the first  
nine months of 1997 when  compared to the same period in 1996.  The largest
component of the increase  occurred in the air courier business and results from
a change in business  mix.  Broadcast  production  material  is now  principally
distributed  electronically  through new technology  developed for this purpose,
resulting in less  consolidation  of air freight in the Company's major markets.
The Company is in effect  shipping  more  packages at a higher cost per package.
Cost of revenues for ground delivery  increased  primarily due to start-up costs
for long-term contracts entered into for newly established contract distribution
business as well as cost  increases  necessary to support an increase in general
revenues.  Cost of  revenues  were  positively  impacted by  approximately  $2.6
million as a result of the sale of the Company's contract logistics  subsidiary.
Excluding the results of the Company's  contract logistics  subsidiary,  cost of
revenues would have increased  $10.2 million  (11.8%) from $86.3 million for the
first three  quarters of 1996 to $96.5  million for the first three  quarters of
1997.

         As a result of the matters  discussed  above,  gross profit declined by
$1.7 million  (5.4%) from $31.3 million for the nine months ended  September 30,
1996 and $29.6 million for the same period in 1997.

         Selling,  general and administrative expenses decreased by $1.2 million
from $29.6 million for the nine months ended September 30, 1996 to $28.4 million
for the comparable  period in 1997.  This represents a 4.1% decrease in selling,
general and  administrative  expenses and results from the Company's  continuing
policy of  consolidation  and cost reduction.  When expressed as a percentage of
revenues,  selling, general and administrative expenses decreased from 24.6% for
the first three quarters of 1996 to 22.5% for the first three quarters of 1997.

         The Company sold its contract logistics  subsidiary on January 31, 1997
and recognized a gain of $816,000 before applicable taxes.

         Interest expense increased by $239,000 from $597,000 for the first nine
months of 1996 to $836,000  for the first nine months of 1997.  The  increase is
primarily due to increased  borrowing levels for the comparable periods and to a
lesser extent, to interest rate increases during the period when the Company was
subject  to a  Forbearance  Agreement  with its  previous  lenders  prior to the
establishment  of its current  credit  facility (see Note 2 to the  accompanying
financial statements).

Results of Operations for the Three Months Ended September 30, 1997 Compared to 
Three Months Ended  September 30, 1996

         Sales for the  quarter  ended  September  30,  1997  increased  by $1.4
million (3.3%) to $44.3 million from $42.9 million for the comparable  period of
1996. For the three months ended September 30, 1997, air revenues increased $1.3
million  (9.8%)  ground  delivery  revenues  increased  $2.5 million  (9.3%) and
continuing  logistics revenues declined by $2.4 million (80.0%) when compared to
the three months ended September 30, 1996.

         The  increase in air  revenues  resulted  from the  internal  growth of
existing  accounts,  ground  delivery  revenues were impacted  positively by the
increased  levels of ground  distribution  business  resulting  from  additional
long-term  contracts and  logistics  revenues  were  negatively  impacted by the
January,  1997 sale of the Company's  contract  logistics  subsidiary  which had
revenues of $1.8 million for the three months ended September 30, 1996.

         Cost of revenues  increased  $2.4 million (7.6%) from $31.4 million for
the three months ended  September  30, 1996 to $33.8 million for the same period
ended  September  30,  1997.  The  increase  was caused  primarily  by increased
business  activity as well as the start up costs  incurred  to begin  multi-year
contracts in the office product and other distribution businesses.  As a result,
gross profit  declined by $1.0 million  (8.7%) from $11.5  million for the third
quarter of 1996 to $10.5 million for the third quarter of 1997.

         Selling,  general and  administrative  expenses  declined for the third
quarter  of 1997 by $1.2  million  (11.3%)  from  $10.6  for the  quarter  ended
September 30, 1996. This decrease reflects the Company's  ongoing  consolidation
and expense reduction policies.

         Interest expense increased due to increased levels of borrowing for the
third quarter of 1997 when compared to the third quarter of 1996.

LIQUIDITY AND CAPITAL RESOURCES

         Working capital decreased by $2.5 million from $6.0 million at December
31, 1996 to $3.5 million at September 30, 1997. The decrease  results  primarily
from  the   reclassification   of  the  Company's  $2  million  of   Convertible
Subordinated  Debt to  current  rather  than  long-term  because  the  debenture
contains an option for the holders to "put" their  debentures  to the Company as
of August,  1998.  Cash and cash  equivalents  decreased  by $500,000  from $1.8
million as of December 31, 1996 to $1.3 million as of  September  30, 1997.  The
decrease  results  primarily from the use of cash for additions to equipment and
leasehold  improvements  of $800,000  and the  repayment of Company debt of $1.2
million, offset by net cash provided by operations of $1.6 million.

         The Company  recorded a capital  obligation of $2.5 million during 1997
in  connection  with  an  agreement  to  acquire  175  delivery  vehicles.  This
transaction  is excluded  from the  statement of cash flows in 1997 as a noncash
transaction.

         Management believes that cash flows from operations,  together with its
borrowing  capacity (see Note 2 of the  accompanying  financial  statements) are
sufficient to support the Company's  operations and general business and capital
liquidity requirements for the foreseeable future.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     The Financial  Accounting Standards Board (the "FASB") has issued three new
standards,  Statement of Financial  Accounting  Standards No. 128, "Earnings Per
Share"  ("SFAS  128")  Statement  of  Financial  Accounting  Standards  No. 130,
"Reporting  Comprehensive  Income"  ("SFAS  130"),  and  Statement  of Financial
Accounting  Standards No. 131,  Disclosures  About Segments of an Enterprise and
Related Information ("SFAS 131").

         SFAS 128  establishes  standards for computing and presenting  earnings
per share,  simplifies the standards for computing earnings per share previously
found in APB Opinion No. 15,  "Earnings Per Share," and makes them comparable to
international  earnings per share  standards.  It replaces the  presentation  of
primary  earnings per share with  presentation  of basic earnings per share.  It
also requires dual  presentation of basic and diluted  earnings per share on the
face of the income  statement for all entities with complex  capital  structures
and requires a  reconciliation  of the  numerator and  denominator  of the basic
earnings per share  computation to the numerator and  denominator of the diluted
earnings per share  computation.  The Company is required to adopt this standard
as of December 15, 1997 and early adoption is not  permitted.  SFAS 128 requires
restatement of all prior period earnings per share calculations  presented.  The
Company  intends to adopt this standard when  required and has  determined  that
adoption of SFAS 128 will have no effect on earnings per share.

         SFAS  130   establishes   standards  for   reporting   and   displaying
comprehensive  income  and  its  components  in a full  set of  general  purpose
financial  statements.  The  objective of SFAS 130 is to report a measure of all
changes in equity of an  enterprise  that  result  from  transactions  and other
economic   events  of  the  period   other   than   transactions   with   owners
("comprehensive  income").  Comprehensive  income is the total of net income and
all other  non-owner  changes in equity.  SFAS 130 is effective for fiscal years
beginning after December 15, 1997,  with earlier  application  allowed,  but not
required.  Upon adoption,  reclassification of comparative  financial statements
provided  for prior  periods  is  required.  The  Company  intends to adopt this
standard when required and is in the process of  determining  the effect of SFAS
130 on the Company's financial statement presentation.

         SFAS 131  introduces  a new model for  segment  reporting,  called  the
"management  approach."  The  management  approach  is based on the way that the
chief operating  decision maker  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  FASB
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 financial statements.

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  against  the  Company,  certain of the
         Company's  present and former executive  officers,  and the co-managing
         underwriters  (the  "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.  Several  additional  purported class actions against the same
         defendants containing  allegations  substantially similar to those made
         in the  Gapszewicz  action were also  filed.  All these cases have been
         consolidated  and a motion to dismiss  was filed by the Company and the
         Underwriters on June 16, 1997.

                  An amended  complaint in the  Gapszewicz  action was served on
         the Company on October 20, 1997. The amended complaint restates many of
         the  allegations  in the original  complaint  and  contains  additional
         alleged  omissions of material fact in both the Company's  registration
         statement  for the Offering and in the  Company's  1996  quarterly  and
         annual filings with the Securities and Exchange Commission. The Company
         believes that the  allegations  contained in the amended  complaint are
         without  merit and the Company  intends to file a new motion to dismiss
         the amended complaint.

                  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  actions,  will  have a
         material  adverse  effect  on the  financial  position  or  results  of
         operations of the Company and its subsidiaries.



Item 6 - Exhibits and Reports on Form 8-K

         (a)   Exhibits

                  10.1  Amendment to the Loan and Security  Agreement, Dated
                        September 30, 1997 By And Between First Union Commercial
                        Corporation and Consolidated Delivery &  Logistics, Inc.
                        And Subsidiaries.

                  27.1  Financial Data Schedule (for electronic submission only)

         (b)      The Company has not filed any reports on Form 8-K during the 
                  relevant period.




<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 13, 1997                CONSOLIDATED DELIVERY & LOGISTICS, INC.



                                            By:___________________________
                                               Albert W. Van Ness, Jr.
                                               Chairman of the Board, Chief
                                                 Executive Officer, and Director

                                            By:___________________________
                                               William T. Brannan
                                               President, Chief Operating
                                                 Officer and Director

                                            By:___________________________
                                               Joseph G. Wojak
                                               Executive Vice President, Chief
                                                 Financial Officer, Treasurer
                                                 and Secretary
                                               (Principal Financial and
                                                 Accounting 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 13, 1997               CONSOLIDATED DELIVERY & LOGISTICS, INC.




                                          By:  /s/ Albert W. Van Ness, Jr.
                                               Albert W. Van Ness, Jr.
                                               Chairman of the Board, Chief
                                                 Executive Officer, and Director

                                          By:  /s/ William T. Brannan
                                               William T. Brannan
                                               President, Chief Operating
                                                 Officer and Director

                                          By:  /s/ Joseph G. Wojak
                                               Joseph G. Wojak
                                               Executive Vice President, Chief
                                                 Financial Officer, Treasurer
                                                 and Secretary
                                               (Principal Financial and
                                                 Accounting Officer)


<PAGE>



                                                   EXHIBIT INDEX


         10.1     Amendment to Loan and Security Agreement, Dated  September 30,
                  1997 By And Between First Union Commercial Corporation and 
                  Consolidated Delivery & Logistics, Inc. And Subsidiaries.


         27.1     Financial Data Schedule (for electronic submission only)


<PAGE>


                                                                     EXIBIT 10.1

                                                       As of September 30, 1997


Consolidated Delivery and Logistics, Inc.
     and Subsidiaries
380 Allwood Road
Clifton, New Jersey 07012

Re:      Loan and Security Agreement dated July 14, 1997 (the "Loan Agreement")

Gentlemen:

                  This  is to  confirm  our  approval  of your  request  for the
following modifications to the Loan Agreement:

                  A. The first sentence of paragraph 2.1 (A) of the Loan 
                     Agreement is modified to read as follows:

2.1      REVOLVING CREDIT FACILITY
                  (A)  Facility.  So long as no  Default  nor  Event of  Default
exists, Lender shall, from time to time hereafter,  through the Expiration Date,
lend to Borrower  such amounts as the  Borrower  may from time to time  request,
based upon the Eligible Loan Value of Eligible Accounts  Receivable as may exist
from time to time, but not to exceed the Borrowing  Base, and as may be reported
by  Borrower  to Lender on a  borrowing  base  report in the form of Exhibit 2.1
which is to be  submitted  by Borrower to Lender by Thursday of each week and as
of the close of business of the preceding Friday.

                  B. Subparagraph 7.2(C) of the Loan Agreement is hereby 
                     modified to read as follows:

7.2 (C) Capital Expenditures. Borrower, on a consolidated basis, will not (i) in
the fiscal year ending December 31, 1997 make Capital  Expenditures in excess of
Four  Million Two Hundred  Thousand  Dollars  ($4,200,000.00),  and (ii) in each
fiscal year ending December 31, 1998 and thereafter make Capital Expenditures in
excess of Three  Million Two Hundred  Thousand  Dollars  ($3,200,000.00)  in the
aggregate per annum.

                  Our  approval  shall not  constitute a waiver of any Events of
Default,  if any so exist, or any future violation of any provisions of the Loan
Agreement or any other Loan Documents.

                  By your execution  hereof Borrower agrees to pay all costs and
expenses,  including  reasonable  attorneys fees and disbursements,  incurred by
Lender in connection with the preparation of this letter agreement.  Capitalized
terms not defined herein but defined in the Loan  Agreement  shall have the same
meaning ascribed to such terms in the Loan Agreement.  Your execution shall also
act as your  representation that the execution of this letter agreement has been
authorized  by  all  required  corporate  action,  that  this  letter  agreement
constitutes the valid and binding obligation of the Borrower,  is enforceable in
accordance  with its terms,  that no Default or Event of Default exists and that
no Material  Adverse  Change of the Borrower  has  occurred  and the  Borrower's
reaffirmation of its grant to Lender of a Lien on the Collateral.


                  Except as herein set forth,  the Loan  Agreement and all other
Loan Documents shall remain in full force and effect. Our agreement as aforesaid
is subject  to your  written  agreement  with the terms  hereof by  signing  and
returning a copy hereof where so indicated below.

                                              First Union Commercial Corporation


                                              By:_______________________________
                                                 name:
                                                 title:

Agreed to:

Consolidated Delivery & Logistics, Inc.
and other Borrowers under the Loan Agreement



By:___________________________________
   name:
   title:

<PAGE>