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


(Mark One)

[ ]             Quarterlyreport  pursuant  to  Section  13 or 15  (d)  of  the
                Securities Exchange Act of 1934 

                For the quarterly period ended March 31, 1999 or

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

                For the  transition  period from_______________to____________


Commission File Number:    0-26954


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


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



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

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

          Indicate  by check  mark  whether  the  Registrant  (1) has  filed all
reports required to be filed by Section 13 or 15 (d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes __ No___

The number of shares of common stock  of  the  Registrant,  par value  $.001 per
share,  outstanding as of May 10, 1999 was 7,311,026.


<PAGE>


                     CONSOLIDATED DELIVERY & LOGISTICS, INC.
                 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1999

                                      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, 1999, 
              and December 31, 1998                                          3
      
              Condensed Consolidated Statements of Operations 
              for the Three Months Ended March 31, 1999 and 1998             4
      
              Condensed Consolidated Statements of Cash Flows for the 
              Three Months Ended March 31, 1999 and 1998                     5
      
              Notes to Condensed Consolidated Financial Statements           6

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

Part II - Other Information

         Item 1 - Legal Proceedings                                         16

         Item 6 - Exhibits and Reports on Form 8-K                          17

Signature                                                                   18



<PAGE>

<TABLE>
<CAPTION>

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

                                                                     March 31,         December 31, 
                                                                        1999               1998
                                                                  --------------       -------------
                                                                    (Unaudited)            (Note 1)

                             ASSETS

CURRENT ASSETS:
<S>                                                                    <C>                   <C> 
  Cash and cash equivalents                                            $1,063                $295
  Accounts receivable, net                                             24,710              24,491
  Prepaid expenses and other current assets                             5,094               2,560
                                                                  --------------      -----------
    Total current assets                                               30,867              27,346

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net                               6,599               6,630
INTANGIBLE ASSETS, net                                                 22,733              16,491
OTHER ASSETS                                                            1,736               1,621
                                                                  ==============      ===========
    Total assets                                                      $61,935             $52,088
                                                                  ==============      ===========

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Short-term borrowings                                                $1,252             $13,577
  Current maturities of long-term debt                                  3,078               3,181
  Accounts payable and accrued liabilities                             19,102              14,784
                                                                  --------------      -----------
    Total current liabilities                                          23,432              31,542

LONG-TERM DEBT                                                         21,967               6,383
OTHER LONG-TERM LIABILITIES                                             3,127               2,756
                                                                  --------------      -----------
    Total liabilities                                                  48,526              40,681
                                                                  --------------      -----------

STOCKHOLDERS' EQUITY
 Preferred stock, $.001 par value; 2,000,000 shares
   authorized; no shares issued and outstanding                            -                   -
 Common stock, $.001 par value; 30,000,000 shares
   authorized;   7,043,702  and  6,843,702   shares  issued  and
   outstanding   at  March  31,  1999  and  December  31,  1998,
   respectively                                                            7                   7
 Additional paid-in capital                                           11,330               9,670
 Treasury stock, 29,367 shares at cost                                  (162)               (162)
 Retained earnings                                                     2,234               1,892
                                                                  --------------      ----------
    Total stockholders' equity                                        13,409              11,407
                                                                  ==============      ==========
    Total liabilities and stockholders' equity                       $61,935             $52,088
                                                                  ==============      ==========


</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,
                                                                           -----------------------------------
                                                                                1999                1998
                                                                           ----------------    ---------------


<S>                                                                           <C>                 <C>    
Revenue                                                                       $51,307             $42,686

Cost of revenue                                                                39,554              33,059
                                                                           ----------------    ---------------

  Gross profit                                                                 11,753               9,627

Selling, general, and administrative expenses                                   9,755               8,428
Depreciation and amortization                                                   1,019                 614
                                                                           ----------------    ---------------

  Operating income                                                                979                 585

Other (income) expense:
  Interest expense                                                                647                 264
  Other income, net                                                              (234)                (80)
                                                                           ----------------    ---------------


Income before provision for income taxes                                          566                 401

Provision for income taxes                                                        224                 160
                                                                           ----------------    ---------------

  Net income                                                                     $342                $241
                                                                           ================    ===============

Net income per share:
  Basic                                                                          $.05                $.04
                                                                           ================    ===============
  Diluted                                                                        $.05                $.04
                                                                           ================    ===============

Basic weighted average common shares outstanding                                6,939               6,667
                                                                           ================    ===============

Diluted weighted average common shares outstanding                              7,447               6,783
                                                                           ================    ===============



     See accompanying notes to condensed consolidated financial statements.

</TABLE>

<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,
                                                                              --------------------------------
                                                                                    1999              1998
                                                                              --------------    --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                  <C>               <C> 
Net income                                                                           $342              $241
Adjustments to reconcile net income to net cash provided by
  operating activities -
    Gain on disposal of equipment and leasehold improvements                          (31)                -
    Depreciation and amortization                                                   1,019               614
    Changes in operating assets and liabilities
      (Increase) decrease in -
        Accounts receivable, net                                                    1,124             2,686
        Prepaid expenses and other current assets                                  (2,653)              271
        Other assets                                                                 (216)              211
      Increase (decrease) in -
        Accounts payable and accrued liabilities                                    3,537              (483)
        Other long-term liabilities                                                   (77)             (134)
                                                                              --------------    --------------
          Net cash provided by operating activities                                 3,045             3,406
                                                                              --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equipment and leasehold improvements                          166                 -
  Purchase of business, net of cash acquired                                       (3,180)                -
  Additions to equipment and leasehold improvements                                  (707)           (1,033)
                                                                              --------------    --------------
          Net cash used in investing activities                                    (3,721)           (1,033)
                                                                              --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Short-term borrowings repayments, net                                           (12,325)           (3,007)
  Borrowing (repayments) of long-term debt, net                                    13,886              (371)
  Issuance of stock warrants in connection with long-term financing                   885                 -
  Deferred financing costs                                                         (1,002)                -
                                                                              --------------    --------------
          Net cash (used in) provided by  financing activities                      1,444            (3,378)
                                                                              --------------    --------------

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

          Net increase (decrease) in cash and cash equivalents                        768              (959)

CASH AND CASH EQUIVALENTS, beginning of period                                        295             1,812
                                                                              --------------    --------------

CASH AND CASH EQUIVALENTS, end of period                                           $1,063              $853
                                                                              ==============    ==============


                      See accompanying notes to condensed consolidated financial
statements.

</TABLE>

<PAGE>


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

(1)      BASIS OF PRESENTATION:

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


(2)      BUSINESS COMBINATIONS:

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

         The above  transaction has been accounted for under the purchase method
         of accounting.  Accordingly, the allocation of the cost of the acquired
         assets and liabilities has been made on the basis of the estimated fair
         value.  The  consolidated  financial  statements  include the operating
         results of Gold Wings from the date of acquisition.


<PAGE>

         The  following  summarized  unaudited pro forma  financial  information
         assumes that the Gold Wings  acquisition  was consummated on January 1,
         respectively  of 1999 and 1998.  This  information  is not  necessarily
         indicative  of the results the Company  would have  obtained  had these
         events actually occurred or of the Company's actual or future results.


                                                   Three Months Ended
                                      ----------------------------------------
                                         March 31, 1999      March 31, 1998
                                         Pro Forma Combined  Pro Forma Combined
                                      ----------------------------------------
                                       (In thousands except per share amounts)

         Revenue                            $53,163              $46,399
         Income from Operations               1,013                  652
         Net Income                         $   333              $   223

         Net Income per share - basic       $   .05              $   .03
         Net Income per share - diluted     $   .04              $   .03


(3)      EXCHANGE LISTING:

         As of February 23,  1999,  shares of the  Company's  common stock began
         trading  on the  American  Stock  Exchange  under the symbol  CDV.  The
         Company's stock formerly traded on the Nasdaq National Market under the
         symbol CDLI.


(4)      SHORT-TERM BORROWINGS:

         In November 1998, CDL and First Union  Commercial  Corporation  ("First
         Union") modified an agreement entered into in July 1997, establishing a
         revolving  credit  facility  (the "First Union  Agreement").  The First
         Union  Agreement  provides  for  an  increase  in the  original  credit
         facility  from $15  million  to  $22.5  million,  provides  CDL with an
         equipment  acquisition  term loan  facility  of up to $2.5  million and
         modifies other terms and conditions. Under the terms of the First Union
         Agreement, the Company is required to maintain certain financial ratios
         and comply with other financial  conditions.  The First Union Agreement
         contains certain covenants for which the Company is in compliance as of
         March 31, 1999.

<PAGE>


(5)      LONG-TERM DEBT:

         On January  29,  1999,  the Company  completed  a $15  million  private
         placement  of  senior   subordinated  notes  and  warrants  with  three
         financial  institutions.  The notes bear  interest at 12% per annum and
         are  subordinate  to all senior debt  including  the  Company's  credit
         facility with First Union  Commercial  Corporation.  Under the terms of
         the notes, the Company is required to maintain certain financial ratios
         and comply with other financial  conditions for which the Company is in
         compliance  as of March 31, 1999.  The notes mature on January 29, 2006
         and may be prepaid by the  Company  under  certain  circumstances.  The
         warrants  expire January 19, 2009 and are exercisable at any time prior
         to expiration at a price of $.001 per equivalent  share of common stock
         for an aggregate of 506,250 shares of the Company's  stock,  subject to
         additional adjustments.  The Company has recorded the fair value of the
         warrants of $885,000 as a credit to  additional  paid-in-capital  and a
         debt discount on the senior  subordinated  notes.  The Company plans to
         use the proceeds to finance  acquisitions as they arise and for general
         working capital purposes.

6)       REPORTABLE SEGMENTS:

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

<TABLE>
<CAPTION>

                                                             Air         Ground        Total
                                                        -------------  ------------- ------------
         Revenue from external customers
<S>                <C>                                    <C>           <C>          <C>    
                   1999                                   $15,023       $36,284      $51,307
                   1998                                    13,375        29,311       42,686
         Intersegment revenue
                   1999                                        13           348          361
                   1998                                        18           418          436
         Interest Expense
                   1999                                       189           458          647
                   1998                                        82           182          264
         Depreciation and Amortization
                   1999                                       205           814        1,019
                   1998                                       131           483          614
         Segment profit
                   1999                                        48           294          342
                   1998                                        36           205          241
         Segment Assets
                   March 31, 1999                          20,724        41,211       61,935
                   December 31, 1998                       11,489        40,599       52,088
         Expenditures for segment assets
                   1999                                       423           284          707
                   1998                                       664           369        1,033


</TABLE>


(7)      LITIGATION:

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

         On April  13,  1999 a  motion  for  summary  judgement  dismissing  the
         complaint,  based upon  statute of  limitation  defenses,  was filed on
         behalf of Securities and Mr. Brana.  According to the briefing schedule
         as presently  set, the  plaintiff  will file its opposing  papers on or
         about June 11, 1999. The defendants  will then have until July 12, 1999
         to serve reply papers.  Discovery is currently pending and as a result,
         the Company is unable to make a  determination  as to the merits of the

<PAGE>

         claim.  The Company does not believe that an adverse  determination  in
         this  matter  would  result  in  a  material   adverse  effect  on  the
         consolidated  financial  position  or  results  of  operations  of  the
         Company.

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


(8)      INCOME (LOSS) PER SHARE:

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

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

                                                                Three Months Ended March 31,
                                                                ------------------------------------
                                                                     1999                 1998
                                                                ---------------       --------------
<S>                                                                <C>                  <C>      
         Basic weighted average common
           shares oustanding                                       6,939,258            6,666,884
         Effect of dilutive securities:
           Stock options                                             157,376              115,832
           Warrants                                                  348,651                    -
           ESPP                                                        1,833                    -
                                                                ===============       ==============
         Diluted weighted average common
           shares outstanding                                      7,447,118            6,782,716
                                                                ===============       ==============

</TABLE>

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

                                                                     1999                 1998
                                                                ---------------       --------------
<S>                                                                  <C>                  <C>    
         Stock options                                               563,125              603,915
         Subordinated convertible debentures                         161,818              180,995
         Seller financed convertible notes                           685,470                    -

</TABLE>

(9)      SUBSEQUENT EVENTS:

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

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

<PAGE>

         one year  promissory  notes bearing  interest at a rate of 7% per annum
         having  similar  terms as the  Westwind  Notes  referred to above.  CDL
         financed the  acquisition  using  proceeds  from its  revolving  credit
         facility with First Union Commercial Corporation.

                  The  following   summarized   unaudited  pro  forma  financial
         information  assumes  that the  Metro  Parcel  Services,  Inc.  and the
         Westwind  Express,  Inc.  acquisitions,  as  well  as  the  Gold  Wings
         acquisition  discussed  in Note  2,  were  consummated  on  January  1,
         respectively  of 1999 and 1998.  This  information  is not  necessarily
         indicative  of the results the Company  would have  obtained  had these
         events actually occurred or of the Company's actual or future results.


                                                         Three Months Ended
                                        ----------------------------------------
                                           March 31, 1999      March 31, 1998
                                         Pro Forma Combined  Pro Forma Combined
                                        ----------------------------------------
                                        (In thousands except per share amounts)

         Revenue                               $55,608              $48,443
         Income from Operations                  1,076                  770
         Net Income                            $   367              $   192

         Net Income per share - basic          $   .05              $   .04
         Net Income per share - diluted        $   .05              $   .04


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

Results of Operations

Revenue for the first  quarter of 1999  increased by $8.6  million,  or 20.1% to
$51.3 million from $42.7 million for the first quarter of 1998. Revenue from the
Company's  recently  completed  acquisitions  contributed  $7.2  million  to the
increase, or 16.9%. Revenue from internal growth contributed $1.4 million to the
increase,  or 3.2% for the quarter.  Air courier revenue declined  slightly from
$13.4  million  in 1998  to  $13.3  million  in 1999  (not  considering  revenue
contributed by acquisitions) as the Company continues to eliminate  unprofitable
business.  Ground  delivery  revenue,  not  considering  revenue  contributed by
acquisitions, increased from $29.3 million to $30.8 million primarily due to the
expansion of business with existing customers.

Cost of revenue  increased by $6.5 million,  or 19.6%,  to $39.6 million for the
first three  months of 1999 from $33.1  million  for the similar  period of 1998
resulting  from  costs  associated  with  the  increase  in  revenue  previously
discussed.

Selling,  general and administrative  expense increased by $1.4 million or 16.7%
to $9.8  million for the first  quarter of 1999 from $8.4  million for the first
quarter of 1998.  The increase is  primarily  attributed  to the  administrative
expense  associated with the Company's  recent  acquisitions.  Depreciation  and
amortization  increased  $405,000 to $1.0  million for the first three months of
1999  compared to  $614,000  for the first three  months of 1998  reflecting  an
increase  attributable  to the  goodwill  recorded as a result of the  Company's
acquisitions.

<PAGE>

As a result of the  matters  discussed  above,  operating  income  increased  by
$394,000,  or 67.4%, from $585,000 for the first quarter of 1998 to $979,000 for
the first quarter of 1999.  Interest expense  increased by $383,000,  or 145.1%,
from  $264,000  for the three  months  ended March 31, 1998 to $647,000  for the
three months ended March 31, 1999 due to increased  borrowing to fund the recent
acquisitions.

Liquidity and Capital Resources

Working capital  increased by $11.6 million from a deficit of $4.2 million as of
December  31, 1998 to working  capital of $7.4  million at March 31,  1999.  The
increase results from a repayment of the Company's  short-term  borrowings under
the Revolving Credit Facility with proceeds from the Senior  Subordinated  Notes
and Warrants.  Cash and cash  equivalents  increased to $1.1 million as of March
31, 1999 from  $295,000 at December 31, 1998.  Cash of $3.1 million was provided
by operations and $1.4 million from financing activities.  Of the cash provided,
$3.2 million was used to purchase businesses and approximately $500,000 was used
to purchase  equipment and leasehold  improvements net of the cash provided from
the sale of similar  equipment.  Capital  expenditures  amounted to $707,000 and
$1.0  million  for the three  months  periods  ended  March  31,  1999 and 1998,
respectively.  These expenditures upgraded our computer systems capabilities and
maintained  Company  facilities in the ordinary course of business.  As of March
31, 1999 the Company had available  under its revolving  credit  facility  $12.2
million.  The  Company  completed  a $15  million  private  placement  of Senior
Subordinated  Notes and  Warrants on January  29,  1999.  Proceeds  will be used
primarily  to  finance   acquisitions  and  to  reduce  outstanding   short-term
borrowings.  The notes  mature in 2006 and bear  interest at the rate of 12% per
annum.  The notes were  issued  with  detachable  warrants  subject to a Warrant
Agreement dated January 29, 1999.

Management believes that cash flows generated 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.

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.


<PAGE>

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

<TABLE>
<CAPTION>

                                                                                          Estimated %     Estimated
                                                   Definition                               Complete     Complete Date
         Phase
------------------------ ---------------------------------------------------------------- -------------- ---------------
<S>                                                        <C>                                 <C>  
Awareness                Generate   awareness   of  the   Y2K   issue                         100% 
                         throughout   the  organization and establish 
                         compliance program.
------------------------ ---------------------------------------------------------------- -------------- ---------------
Inventory                Analyze all  relevant  hardware/application                          100% 
                         software/operating  systems and networks for 
                         compliance
------------------------ ---------------------------------------------------------------- -------------- ---------------
Assessment,              Prioritize  hardware  and  software  issues,                         80%            8/31/99
Conversion               initiate  changes  necessary  to  achieve                              
Testing and              compliance  and test  changes  made for
Implementation           actual compliance.

------------------------ ---------------------------------------------------------------- -------------- ---------------
Imbedded Technology      Determine whether equipment with imbedded                            90%            8/31/99
                         technology,  such as  PBX  switches, elevators, 
                         alarm   systems,   etc.  are  Y2K compliant.  
                         Analysis to date has identified limited exposure
                         in this area. Analysis of recent acquisitions 
                         continues.
------------------------ ---------------------------------------------------------------- -------------- ---------------
Third-Party Interfaces   Determine whether electronic  interfaces with                        70%            9/30/99
                         third parties are compliant.  There are only a 
                         few such  interfaces  that will be fully tested
                         later in the  year.  If  necessary, contingency
                         arrangements will be readily  available,  as the 
                         interfaces are  not "real-time".
------------------------ ---------------------------------------------------------------- -------------- ---------------
Third-Party              Determine whether third  parties that provide                        70%            7/30/99
Relationships            material services/supplies are compliant. Feedback 
                         to date indicates that companies with whom we have 
                         a material relationship  are well  advanced  in  
                         bringing  their internal systems into compliance.
                         Less well defined is whether  their third  parties
                         are in compliance.
------------------------ ---------------------------------------------------------------- -------------- ---------------
                         We will continue to cooperate  in the exchange of                    50%            9/30/99
                         information with  material  third  parties in an
                         effort  to  ensure  their compliance  and/or  
                         assess the impact of their  non-compliance.
                         Where the risk of  non-compliance  is  serious 
                         we will select alternate vendors.
------------------------ ---------------------------------------------------------------- -------------- ---------------
</TABLE>


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

         Where practical the Company will develop  contingency  plans during the
coming months in an effort to ensure minimal  disruption to our clients. A pilot
project in this regard is currently in development with a major client.

Inflation

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


Quantitative and Qualitative Disclosures About Market Risk.

         CDL's major "market risk"  exposure is the effect of changing  interest
rates.  CDL manages its interest  expenses by using a  combination  of fixed and
variable  rate  debt.  At March  31,  1999,  the  Company's  debt  consisted  of
approximately  $25 million of fixed rate debt with a weighted  average  interest
rate of 10.6% and $1.3  million of  variable  rate debt with a weighted  average
interest  rate of 7.5% The amount of variable  rate debt  fluctuates  during the
year based on CDL's cash  requirements.  If interest rates on such variable rate
debt were to increase  by 75 basis  points  (one-tenth  of the rate at March 31,
1999),  the net impact to the  Company's  results of  operations  and cash flows
would decrease by approximately $30,000.



<PAGE>


                           Part II - OTHER INFORMATION

Item 1 - Legal Proceedings.


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

         On April  13,  1999 a  motion  for  summary  judgement  dismissing  the
complaint,  based upon statute of  limitation  defenses,  was filed on behalf of
Securities and Mr. Brana.  According to the briefing  schedule as presently set,
the  plaintiff  will file its  opposing  papers on or about June 11,  1999.  The
defendants  will then have until July 12, 1999 to serve reply papers.  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
effect on the  consolidated  financial  position or results of operations of the
Company.

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

<PAGE>

Item 6 - Exhibits and Reports on Form 8-K

         (a)      Exhibit

                  27.1  Financial Data Schedule (for electronic submission only)

         (b)      Report  on Form  8-K/A  filed on May 3,  1999  concerning  the
                  Company's  asset and stock  purchase  agreement  between  Gold
                  Wings and Sureway Air Traffic Corporation.

         (c)      Report on Form 8-K filed  February  26,  1999  concerning  the
                  Company's  asset and stock  purchase  agreement  between  Gold
                  Wings and Sureway Air Traffic Corporation.

         (d)      Report on Form 8-K filed  February  26,  1999  concerning  the
                  Company's $15 million private placement of senior subordinated
                  notes and warrants with three financial institutions.

         (e)      Report on Form 8K/A filed on February 22, 1999  concerning the
                  Company's  asset  and  stock  purchase  agreement  of  Manteca
                  Enterprises, Inc.


<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 17, 1999                      CONSOLIDATED DELIVERY & LOGISTICS, INC.




                                         By:  \s\ Albert W. Van Ness, Jr.
                                              __________________________________
                                              Albert W. Van Ness, Jr.
                                              Chairman of the Board, Chief 
                                              Executive Officer and Chief 
                                              Financial Officer