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

(Mark One)

|X|   Quarterly report pursuant to Section 13 or 15 (d) of the Securities
      Exchange Act of 1934
      For the quarterly period ended March 31, 2001 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

                                   CD&L, 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.)

80 Wesley Street                                           07606
South Hackensack, New Jersey                             (Zip Code)
(Address of principal executive offices)

                                 (201) 487-7740
              (Registrant's telephone number, including area code)

      Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

The number of shares of common stock of the Registrant, par value $.001 per
share, outstanding as of May 7, 2001 was 7,658,660.


                                       1
<PAGE>

                                   CD&L, INC.
                 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2001

                                      INDEX
                                                                            Page
                                                                            ----

Part I - Financial Information (unaudited)

      Item 1 - Financial Statements

         CD&L, Inc. and Subsidiaries
            Condensed Consolidated Balance Sheets as of March 31, 2001 and
                  December 31, 2000                                            3
            Condensed Consolidated Statements of Operations for the Three
                  Months Ended March 31, 2001 and 2000                         4
            Condensed Consolidated Statements of Cash Flows for the Three
                  Months Ended March 31, 2001 and 2000                         5
            Notes to Condensed Consolidated Financial Statements               6

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

Part II - Other Information

      Item 1 - Legal Proceedings                                              12

      Item 6 - Exhibits and Reports on Form 8-K                               12

Signature                                                                     13


                                       2
<PAGE>

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

                                                        March 31,   December 31,
                                                          2001          2000
                                                       -----------  ------------
                                                       (Unaudited)    (Note 1)

                   ASSETS
                   ------

CURRENT ASSETS:
  Cash and cash equivalents                               $2,605         $319
  Accounts receivable, net                                14,411       17,596
  Prepaid expenses and other current assets                3,487        2,917
  Net assets of discontinued operations                       --        4,591
                                                         -------      -------
    Total current assets                                  20,503       25,423

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net                  3,060        2,841
INTANGIBLE ASSETS, net                                    20,474       20,666
NOTE RECEIVABLE FROM STOCKHOLDER, net                        409          408
OTHER ASSETS                                               2,316          402
NET ASSETS OF DISCONTINUED OPERATIONS                         --        8,045
                                                         -------      -------
    Total assets                                         $46,762      $57,785
                                                         =======      =======

    LIABILITIES AND STOCKHOLDERS' EQUITY
    ------------------------------------

CURRENT LIABILITIES:
  Short-term borrowings                                      $--      $11,169
  Current maturities of long-term debt                     5,867        5,752
  Accounts payable and accrued liabilities                11,073       11,932
  Net liabilities of discontinued operations                 668           --
                                                         -------      -------
    Total current liabilities                             17,608       28,853

LONG-TERM DEBT                                            18,008       17,765
OTHER LONG-TERM LIABILITIES                                1,274        1,283
                                                         -------      -------
    Total liabilities                                     36,890       47,901
                                                         -------      -------

COMMITMENTS AND CONTINGENCIES                                 --           --

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; 7,688,027 issued at March 31, 2001 and
  December 31, 2000                                            8            8
 Additional paid-in capital                               12,883       12,883
 Treasury stock, 29,367 shares at cost                      (162)        (162)
 Accumulated deficit                                      (2,857)      (2,845)
                                                         -------      -------
    Total stockholders' equity                             9,872        9,884
                                                         -------      -------
    Total liabilities and stockholders' equity           $46,762      $57,785
                                                         =======      =======

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>

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

                                                            For the Three Months
                                                               Ended March 31,
                                                            --------------------
                                                               2001       2000
                                                             -------    -------

Revenue                                                      $40,037    $42,903

Cost of revenue                                               31,453     34,181
                                                             -------    -------

  Gross profit                                                 8,584      8,722

Selling, general, and administrative expenses                  7,203      9,349
Depreciation and amortization                                    717        935
                                                             -------    -------

  Operating income (loss)                                        664     (1,562)

Other expense (income):
  Interest expense                                               729        691
  Other income, net                                              (45)       (19)
                                                             -------    -------

Loss from continuing operations before benefit
  for income taxes                                               (20)    (2,234)

Benefit for income taxes                                          (8)      (880)
                                                             -------    -------

Loss from continuing operations                                  (12)    (1,354)

Income from discontinued operations                               --        244

                                                             -------    -------
  Net loss                                                      ($12)   ($1,110)
                                                             =======    =======

Basic loss per share:
  Continuing operations                                        ($.00)     ($.18)
  Discontinued operations                                      ($.00)      $.03
                                                             -------    -------
  Net loss per share                                           ($.00)     ($.15)
                                                             =======    =======

Diluted loss per share:
  Continuing operations                                        ($.00)     ($.18)
  Discontinued operations                                      ($.00)      $.03
                                                             -------    -------
  Net loss per share                                           ($.00)     ($.15)
                                                             =======    =======

Basic weighted average common shares outstanding               7,659      7,353
                                                             =======    =======

Diluted weighted average common shares outstanding             7,659      7,353
                                                             =======    =======

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

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

<TABLE>
<CAPTION>
                                                                   For the Three Months
                                                                      Ended March 31,
                                                                   --------------------
                                                                      2001       2000
                                                                    -------    -------
<S>                                                                 <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                               ($12)   ($1,110)
Adjustments to reconcile net loss to net cash provided by
  operating activities of continuing operations -
    Gain on disposal of equipment and leasehold improvements            (35)        (5)
    Income from discontinued operations                                  --       (244)
    Depreciation and amortization                                       717        935
    Changes in operating assets and liabilities
      (Increase) decrease in -
        Accounts receivable, net                                      3,185        (31)
        Prepaid expenses and other current assets                      (222)     1,411
        Other assets                                                     17       (288)
      Increase (decrease) in -
        Accounts payable and accrued liabilities                     (1,039)       284
        Other long-term liabilities                                      (9)      (362)
                                                                    -------    -------
          Net cash provided by operating activities of continuing
            operations                                                2,602        590
                                                                    -------    -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of equipment and leasehold improvements            159         27
  Proceeds from sale of business                                     11,425         --
  Additions to equipment and leasehold improvements                    (107)      (167)
                                                                    -------    -------
          Net cash provided by (used in) investing activities of
            continuing operations                                    11,477       (140)
                                                                    -------    -------

CASH FLOWS FROM FINANCING ACTIVITIES
  Short-term (repayments) borrowings, net                           (11,169)     1,417
  Repayments of long-term debt                                         (315)      (475)
                                                                    -------    -------
          Net cash (used in) provided by financing activities of
            continuing operations                                   (11,484)       942
                                                                    -------    -------

CASH USED IN DISCONTINUED OPERATIONS                                   (309)    (1,175)
                                                                    -------    -------

          Net increase in cash and cash equivalents                   2,286        217

CASH AND CASH EQUIVALENTS, beginning of period                          319        326
                                                                    -------    -------

CASH AND CASH EQUIVALENTS, end of period                             $2,605       $543
                                                                    =======    =======
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>

                           CD&L, 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, 2000 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 months ended March 31, 2001 are not necessarily
      indicative of the results that may be expected for any other interim
      period or for the year ending December 31, 2001. For further information,
      refer to the consolidated financial statements and footnotes thereto
      included in the CD&L, Inc. (the "Company" or "CD&L") Form 10-K for the
      year ended December 31, 2000.

      The consolidated financial statements included herein have been prepared
      on the basis that the Company will continue as a going concern. The
      Company suffered a loss from operations of ($6,229,000) for the year ended
      December 31, 2000 and at December 31, 2000 had a working capital deficit
      of ($3,430,000). In March 2001, the Company sold its air delivery business
      and used the proceeds from the sale to pay down a portion of the Company's
      existing debt. Additionally, management has taken steps to mitigate the
      factors that led to the net loss in 2000, which arose as a result of
      increased labor, insurance and vehicle operating costs and increased
      selling, general and administrative expenses. As a result of such actions,
      working capital as of March 31, 2001 has improved to $2,895,000.
      Management believes that based upon the results to date and the projected
      results for the remainder of 2001 that cash flow from operations will be
      sufficient to meet its cash requirements in the next twelve months.

      Certain prior year amounts have been reclassified in order to conform to
      the current year presentation.

(2)   SHORT-TERM BORROWINGS:

      Effective as of March 30, 2001, CD&L and First Union Commercial
      Corporation ("First Union") modified the Loan and Security Agreement (the
      "First Union Agreement") entered into on July 14, 1997. The revolving
      credit facility was decreased from $22,500,000 to $15,000,000 as a result
      of the March 30, 2001 consummation of a transaction providing for the sale
      of certain assets and liabilities of Sureway Air Traffic Corporation, Inc.
      ("Sureway"), the air delivery business (See Note 4). In addition, the
      First Union Agreement was changed to amend the covenants and financial
      ratios that the Company must maintain. Under the terms of the First Union
      Agreement, as amended, the Company is in compliance with all such
      covenants and financial ratios as of and for the three months ended March
      31, 2001.

(3)   LONG-TERM DEBT:

      On January 29, 1999, the Company completed a $15,000,000 private placement
      of senior subordinated notes and warrants (the "Senior Notes") with three
      financial institutions. The Senior Notes bear interest at 12% per annum
      and are subordinate to all senior debt including the Company's credit
      facility with First Union. The Senior Notes mature on January 29, 2006 and
      may be prepaid by the Company under certain circumstances. The warrants
      expire January 19,


                                       6
<PAGE>

      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 as a credit to
      additional paid-in-capital and a debt discount on the Senior Notes. Under
      the terms of the Senior Notes, the Company is required to maintain certain
      financial ratios and comply with other financial conditions. Effective as
      of March 30, 2001, CD&L and the note holders modified the Senior
      Subordinated Loan Agreement (the "Senior Note Agreement") entered into on
      January 29, 1999. The Senior Note Agreement, as amended, provides for
      repayment of $1,000,000 of the Senior Notes on April 2, 2001 and four
      repayments of $250,000 each on August 15, 2001, November 15, 2001, May 15,
      2002 and August 15, 2002 provided that the Company is in compliance with
      the terms of the First Union Agreement. In addition, the Senior Note
      Agreement was amended to change the financial ratios and conditions that
      the Company must comply with and the interest rate on the Senior Notes was
      adjusted to between 12% and 15% per annum. The interest rate charged each
      calendar quarter is dependant on the Company's compliance with the
      financial ratios and conditions in the Senior Note Agreement, as amended.
      As of March 31, 2001, the interest rate being charged on the Senior Notes
      is 13.5%. Under the terms of the Senior Note Agreement, as amended, the
      Company is in compliance with all such financial ratios and conditions as
      of and for the three months ended March 31, 2001. As a result, the
      interest rate being charged on the Senior Notes decreased to 12.0% on May
      16, 2001.

(4)   DISCONTINUED OPERATIONS:

      On December 1, 2000, CD&L made a strategic decision to dispose of its air
      delivery business. On March 30, 2001, CD&L consummated a transaction
      providing for the sale of certain assets and liabilities of Sureway, the
      air delivery business. The selling price for the net assets was
      approximately $14,150,000 and is comprised of $11,650,000 in cash, a
      promissory note (the "Note Receivable") for $2,500,000 ($500,000 of which
      is based upon the ultimate development of certain liabilities retained by
      CD&L) and contingent cash payments based upon the ultimate development of
      certain liabilities retained by CD&L. The Note Receivable bears interest
      at a rate of 10.0% per annum, with interest only in monthly installments.
      The entire balance of principal, plus all accrued interest, is due and
      payable on March 30, 2006. The $2,000,000 of the Note Receivable recorded
      upon the consummation of the sale is included in Other Assets in the
      accompanying financial statements. Accordingly, the financial position and
      operating results have been segregated from continuing operations and
      reclassified as a discontinued operation in the accompanying financial
      statements.

      As a result of the sale of its air delivery business, the Company now
      operates in only one reportable business segment.

(5)   NOTE RECEIVABLE FROM STOCKHOLDER:

      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. Securities and Mr. Brana have
      filed cross claims against certain defendants including the insurance
      brokers for certain of the policies at issue. Under the terms of its
      acquisition of Securities, 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 in the amount of 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 agreed to repay the Company on December 1, 2002, together with
      interest calculated at a rate per annum equal to the rate charged the
      Company by its senior


                                       7
<PAGE>

      lender. Mr. Brana has delivered 357,301 shares of CD&L common stock to the
      Company as collateral for the note. On September 8, 2000 the parties
      entered into a settlement agreement in which Securities and Mr. Brana
      agreed to pay Liberty Mutual $1,300,000. An initial payment of $650,000
      was made on October 16, 2000, $325,000 plus interest is due in monthly
      installments ending July 1, 2001 and $325,000 plus interest is due on
      August 1, 2001. Interest will be charged at 10.5% per annum. At March 31,
      2001 and December 31, 2000 the Company had a receivable due from Mr. Brana
      totaling $2,909,000 and $2,908,000, respectively. As of December 31, 2000,
      considering the market value of the collateral and Mr. Brana's failure to
      update and provide satisfactory evidence to support his ability to pay the
      promissory note, the Company recorded a $2,500,000 reserve against the
      receivable. Based upon the facts and circumstances as of the current time,
      the reserve remained the same as of March 31, 2001.

(6)   LITIGATION:

      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
      delivery operations. In connection therewith, the Company has recorded
      reserves of $397,000 and $455,000 as of March 31, 2001 and December 31,
      2000, respectively. 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.

(7)   LOSS PER SHARE:

      Basic loss per share includes no dilution and is computed by dividing loss
      available to common stockholders by the weighted average number of common
      shares outstanding for the period. Diluted loss per share reflects the
      potential dilution if certain securities are converted and also includes
      certain shares that are contingently issuable. Because of the Company's
      net loss for the three months ended March 31, 2001, equivalent shares
      represented by 12,429 Stock Options and 505,668 Warrants would be
      anti-dilutive and therefore are not included in the loss per share
      calculation for the three months ended March 31, 2001. Because of the
      Company's net loss for the three months ended March 31, 2000, equivalent
      shares represented by 118,463 Stock Options, 506,094 Warrants and 5,744
      Employee Stock Purchase Plan shares would be anti-dilutive and therefore
      are not included in the loss per share calculation for the three months
      ended March 31, 2000.

      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:

                                       Three Months Ended
                                            March 31,
                                     -----------------------
      (000s)                            2001         2000
                                     ---------     ---------
      Stock options                    2,218          668
      Subordinated
          convertible debentures          16          146
      Seller financed
          convertible notes              593          593


                                       8
<PAGE>

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

Overview

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

Disclosure Regarding Forward-Looking Statements

The Company is provided a "safe harbor" for forward-looking statements contained
in this report by the Private Securities Litigation Reform Act of 1995. The
Company may discuss forward-looking information in this report such as its
expectations for future business development, cost reduction programs,
product-based operating structures, revenue growth and fuel, insurance and labor
cost controls, as well as its liquidity and capital needs and its future
prospects. These forward-looking statements involve certain risks and
uncertainties that may cause the actual events or results to differ materially
from those indicated by such forward-looking statements. Potential risks and
uncertainties include without limitation the risk that the Company will be
unable to continue growing revenue internally, or that the Company will be
unable to price its services so as to increase its profit margins, or that the
Company's cost reduction programs will fail to prevent further erosion of its
profit margins, or that the Company will be unable to reduce its fuel, insurance
and labor costs, or that the Company will be unable to achieve the other cost
savings or additional profits for forward quarters contemplated by the Company's
business management strategy, or that the Company will be unable to continue to
meet its financial covenants under existing credit lines or otherwise have
adequate cash flow from operations or credit facilities to support its
operations and revenue growth, or that the slowing economy will reduce demand
for the Company's services or other risks specified in the Company's 2000 Report
on Form 10-K and other SEC filings.

RESULTS OF OPERATIONS

Income and Expense as a Percentage of Revenue

                              For the Three Months
                                     Ended
                                   March 31,
                             ---------------------
                                2001        2000
                             ---------   ---------

Revenue                        100.0%      100.0%

Gross profit                    21.5%       20.4%

Selling, general, and
   administrative expenses      18.0%       21.8%
Depreciation and
amortization                     1.8%        2.2%

Operating income (loss)          1.7%       (3.6%)

Interest expense                 1.8%        1.6%

Loss from continuing
operations                      (0.0%)      (3.2%)


                                       9
<PAGE>

Three Months Ended March 31, 2001 Compared to the Three Months Ended March 31,
2000

Revenue for the three months ended March 31, 2001 decreased by $2.9 million, or
6.7%, to $40.0 million from $42.9 million for the three months ended March 31,
2000. The decrease in revenue is primarily due to the Company's ongoing efforts
to increase its profit margins and eliminate less profitable business. As a
result of a portfolio review, contracts with certain customers that had
unacceptable profit margins were given notice of rate increases. If the rate
increases were not accepted, the contracts were terminated. This revenue loss
was partially offset by the effect of fuel surcharges and price increases
implemented throughout 2000 that remained in effect for the first quarter of
2001.

Cost of revenue decreased by $2.7 million, or 8.0%, to $31.5 million for the
three months ended March 31, 2001 from $34.2 million for the three months ended
March 31, 2000. Cost of revenue for the three months ended March 31, 2001
represents 78.5% of revenues as compared to 79.6% for the same period in 2000.
The decrease in cost of revenue is due primarily to a decrease in labor and
vehicle operating costs as compared to the same period in 2000. Both the
elimination of less profitable business and better utilization of direct labor
have contributed to the 1.1 percentage point increase in gross profit margin. A
slowing economy has helped in recruiting and retaining reliable couriers and
subcontractors at reasonable costs.

Selling, general and administrative expenses ("SG&A") decreased by $2.1 million,
or 23.0%, to $7.2 million for the three months ended March 31, 2001 from $9.3
million for the same period in 2000. Stated as a percentage of revenue, SG&A
decreased to 18.0% for the three months ended March 31, 2001 as compared to
21.8% for the same period in 2000. The decrease in SG&A is due primarily to both
the Company's ongoing efforts to reduce and better control such costs and
certain non-recurring items recorded during the same period in 2000. The
non-recurring items recorded during the first quarter of 2000 were the bad debt
expense recorded as a result of a previous customer filing for bankruptcy
protection, the administrative expenses of the companies acquired in 1999 and
certain consulting expenses.

Depreciation and amortization decreased by $0.2 million, or 23.3%, to $0.7
million for the three months ended March 31, 2001 from $0.9 million for the same
period in 2000. The decrease in depreciation and amortization is due primarily
to certain equipment and leasehold improvements reaching the end of their
depreciable lives during 2000 that have not yet been replaced as of March 31,
2001.

As a result of the factors discussed above, operating income (loss) increased by
$2.2 million for the three months ended March 31, 2001 as compared to the same
period in 2000.

Loss from continuing operations decreased by $1.3 million for the three months
ended March 31, 2001 as compared to the same period in 2000. This was primarily
due to the factors discussed above and similar interest expense and other income
for the three months ended March 31, 2001 as compared to the same period in
2000.

During the three months ended March 31, 2000 the Company also recorded $0.2
million of income from discontinued operations net of tax as a result of the
activities of the air delivery business.

Net loss decreased by $1.1 million to a loss of ($0.0) million for the three
months ended March 31, 2001 as compared to a loss of ($1.1) for the same period
in 2000 for the reasons discussed above.


                                       10
<PAGE>

Liquidity and Capital Resources

Working capital increased from ($3.4) million as of December 31, 2000 to $2.9
million as of March 31, 2001. This increase of $6.3 million reflects a decrease
in the amount of accounts receivable as a result of successful collection
efforts and the cash received as a result of the sale of the Company's air
delivery business. Cash and cash equivalents increased from $0.3 million to $2.6
million. Cash was provided by operating activities (a decrease in accounts
receivable offset partially by a decrease in accounts payable and accrued
liabilities during the three months ended March 31, 2001), provided by investing
activities (proceeds received from the sale of the Company's air delivery
business), used by financing activities (a decrease in the Company's borrowings
on its line of credit and repayments of long-term debt) and used by discontinued
operations. Capital expenditures amounted to $0.1 million for the three months
ended March 31, 2001. These expenditures primarily upgraded Company computer
system capability and improved Company facilities in the ordinary course of
business. As of March 31, 2001 the Company had total cash on hand and borrowing
ability of $1.1 million under its revolving credit facility after adjusting for
the restrictions for outstanding letters of credit and the subordinated
debentures.

Management believes that anticipated 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. However, if cash flows from operations materially fall short of our
projections, no assurances can be given with respect to the adequacy of existing
credit lines, the availability of alternative borrowing sources or the ability
to sell non-strategic assets.

Inflation

Other than the described effects of recent fuel increases and labor cost
increases experienced in 2000, 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

CD&L's major "market risk" exposure is the effect of changing interest rates.
CD&L manages its interest expense by using a combination of fixed and variable
rate debt. At March 31, 2001, the Company's debt consisted of approximately
$23.9 million of fixed rate debt with a weighted average interest rate of 12.0%.
The amount of variable rate debt fluctuates during the year based on CD&L's cash
requirements and was $0 at March 31, 2001. If interest rates on variable rate
debt were to increase by 82 basis points (one-tenth of the rate at March 31,
2001), the net impact to the Company's results of operations and cash flows for
the three month period ended March 31, 2001 would be a decrease of approximately
$20,000.


                                       11
<PAGE>

                           Part II - OTHER INFORMATION

Item 1 - Legal Proceedings.

      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
      delivery operations. In connection therewith, the Company has recorded
      reserves of $397,000 and $455,000 as of March 31, 2001 and December 31,
      2000, respectively. 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.

Item 6 - Exhibits and Reports on Form 8-K

      (a)   Exhibit

                 No exhibits will be filed with this Form 10-Q.

      (b)   Report on Form 8-K filed on May 1, 2001 concerning the Company's
            asset sale agreement between its subsidiary, Sureway Air Traffic
            Corporation, Inc. and Sureway Worldwide, LLC, a subsidiary of Global
            Delivery Systems, Inc.


                                       12
<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 21, 2001                       CD&L, INC.


                                          By:  \s\ Russell J. Reardon
                                               ----------------------
                                               Russell J. Reardon
                                               Vice President and
                                               Chief Financial Officer


                                       13