Last year freight forwarders and shippers had a hard time securing space on flights out of South Korea. Backlogs were the norm rather than the exception, as Asian exports to North America rose dramatically in the summer.

''Many agents had trouble getting capacity last year,'' said Nick Lee, general manager of air inbound development at San Francisco-based forwarder Fritz Cos.That had less to do with the Korean export market than with the focus of Korean airlines on transit traffic through Seoul.

Still, traffic to and from Korea accounted for 40 percent of the volume of Korean Air, one of the largest cargo carriers in the world, which carried about a million tons last year.

But since November, finding space is no longer a problem, as Korea's financial crisis slowed down exports. ''Volumes have been very soft,'' said Mike Zolnierowicz, general sales manager for cargo at United Airlines.

There has been speculation that the low value of the Korean won, which has fallen by about 50 percent since last summer, might spark a boost in ex- ports.

Bill Slattery, president of cargo of Northwest Airlines, said low currencies in Asia will continue to drive export volumes, but he expressed some reservations about Korea. ''It has been hit pretty badly,'' he said.

Korean products have become cheaper in the United States, but the raw materials that the country imports have risen in price due to the currency devaluation.

''We import a lot of goods from the United States for basic resources for exports of finished products. Now manufacturers are running out of raw materials and haven't got the money to buy new ones,'' said S.H. Lee, Korean Air's assistant general manager of cargo for the Americas.

''Also, a lot of banks in Korea are not lending money now. They have to secure their assets under IMF requirements,'' said Mr. Lee, referring to the International Monetary Fund. ''But the whole economy relies on trade. I think the government will subsidize industry efforts to import raw materials.''

According to James Wang, executive vice president and director for the Far East at Seattle-based forwarder Expeditors International of Washington, shippers in Korea don't expect the low won to spark increased airborne exports any time soon.

''They told us it won't have an impact in the short term. It will show in six months to a year,'' he said.

In the opposite direction, the decline of the won has exacerbated the weakness of exports to South Korea.

Even before the crisis hit, the dollar's strength had been hampering air cargo volumes to Korea.

United, which launched DC-10 freighter flights to Korea via Japan last fall, is carrying little traffic to Seoul. Japan is the freighters' main destination in Asia, followed by the Philippines and Taiwan.

Mr. Wang predicted a further decline in westbound volumes.

''The U.S. dollar is so strong. Manufacturers in Asia try to decrease imports from the United States,'' he said.

His skepticism is shared by most other players, including Y.I. Choi, general manager of cargo for the Americas at Asiana Airlines, a Korean carrier.

The depressed market is putting pressure on air-freight rates. Korean's Mr. Lee reported a 20 percent decline in the second half of 1997, saying that some carriers are now offering ''ridiculous prices.''

Mr. Choi said that, given the vast amount of capacity that has been deployed in recent years, he expects rates to drop further.

''We should see westbound rates come down,'' confirmed Chuck Cocci, senior director of air-freight products at Fritz Cos. ''We've heard some noises from carriers that they will be competitive if others drop their rates.''


Some airlines have responded to the situation by reducing flights to Korea, although that response was driven chiefly by an even more alarming decline in passenger numbers.

Asiana, Ansett and Qantas all scrapped flights between Australia and Seoul, Garuda reduced the number of flights from Indonesia to Korea, and Asiana also stopped all European flights.

Northwest was scheduled to suspend its nonstop Detroit-Seoul service Monday, cutting its Korea flights from 10 to seven.

Korean and Asiana admit they are considering further reductions, amid widespread expectations that more flights to Korea will be scrapped this year.

''There has been no announcement of flight cancellations yet, but there are lots of rumors,'' Mr. Wang said.

United is not actively contemplating a reduction of its presence at this stage, Mr. Zolnierowicz said. ''Our attitude now is to wait and see. We're just watching the market so far.

''Our freighter flights to Seoul started in late October, so it's difficult for us to come to a decision.''


Others are concentrating on other Asian markets, particularly China. While cutting back on Korea, Northwest is increasing its flights to Beijing and Shanghai, and a similar strategy is being pursued by Korean Air.

Actually, Korea is a major conduit for China traffic already. Growing volumes of freight are shipped from northern China to South Korea, whence they are flown to North America.

According to Mr. Lee of Fritz, this approach saves shippers 30 percent to 40 percent in transportation costs.

''China hasn't got enough air-freight capacity; freighter service is still very limited. And it's one of the good revenue sources for the carriers,'' Mr. Wang observed.

Not long ago, Korean customs still constituted an impediment, with clearance taking more than two days.

Mr. Wang said customs has improved to the degree that some shipments can be cleared on the same day. ''It's not 100 percent electronic clearance yet, but I think they will catch up in one to two years.''

While airlines are considering reductions in capacity, forwarders have to be more alert than usual about outstanding payments, partly because a number of Korean firms have gone to the wall in recent months, partly because consignees are more concerned about their own cash flow than that of their service providers.


Moreover, carriers and agents alike have been quick to adjust their local rates to make up for currency depreciation. ''Our big concern when dealing with customers is having to watch their financial situation. If we don't watch our cash flow carefully, we will be affected,'' Mr. Wang said.

Expeditors International has tightened its credit line. It is asking customers for faster payment - one or two days instead of 15 after delivery.

Mr. Wang acknowledged that this is a difficult balancing act. Competition between agents has increased considerably in recent years, after the Korean authorities allowed foreign companies to operate on their own in 1996.

While there were fewer than 20 agents handling air cargo in Korea a few years ago, today there are more than 100. Large global logistics providers have been gaining market share, but forwarders' margins have been shrinking.

The planned opening of the new Inchon Airport 30 miles from downtown Seoul in 2001 will force agents to stand on two feet in Korea.

In contrast with what is happening in Hong Kong - where the new Chek Lap Kok Airport will replace Kai Tak - Seoul's current international airport, Kimpo, will remain in operation.