The emergence of a small number of nearly global forwarders has important implications for developing countries. Freight forwarding TNCs have been leaders in the extension of world-class logistics services to developing country markets like the Philippines. Moreover, the multi-nationals offer their traditional transport services at rates that are often much lower than what local forwarders can afford. In part, the TNCs' cost advantage reflects the economies of scale larger forwarders enjoy in buying space from airlines. And the multinational forwarders also enjoy economies of scope; by operating in many different geographic markets and offering a wide range of services, they are better able to satisfy the increasingly complex logistics require- ments of major manufacturers. Economies of scope are also evident in the flexibility that large forwarders with complex services enjoy to price below cost in one market in order to secure a important account globally. As one local Filipino forwarder glumly told us, "Big forwarders can lose in Manila; we can't. It's our bread and butter. Out of twenty lanes [export markets], they [multinational forwarders] can afford to lose on one from Manila. If we lose here, we lose