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Rising fuel costs and lower demand will result in a "shakeout" within freight transport, according to an analysis of business trends by auditor PricewaterhouseCoopers (PWC), with distress sales and exits marking the future. But despite another prediction of grim times in the sector, the report also highlights waste logistics and final-mile deliveries as growth areas.

The professional services firm says a current key feature of transport, distribution and logistics is consolidation and lists  Brake Bros, Christian Salvesen, TDG, Eddie Stobart and EWS as examples of companies integrating within the last 18 months. PWC says the trend towards multimodal transport and logistics is driven by customers demanding flexibility and supply-chain efficiencies. It cites the £138m reverse takeover of Eddie Stobart by Westbury Property Fund as an example of a "need for size and the integration of all modes of industrial logistics".

But the auditor warns that many companies are trading on thin margins and will be pushed to the wall by the economic slowdown and spiralling fuel prices. It adds: "Conversely, a growth area within the sector is waste logistics, with customised solutions required for recycling plastic, glass and paper, in both the commercial and municipal sectors. "Final mile logistics is another interesting area. It requires innovation and investment on  the back of the growth in internet-based home shopping."