Feeder and shortsea newcomer is in it for the long haul

When asked if the world needs another feeder company, Folk Maritime’s CEO Poul Hestbaek is stoic, suggesting that the answer is probably no. However, he goes on to explain that the newly launched Folk Maritime has a very different mandate: “It’s much broader than that.”

The Folk mandate goes beyond opening up new shipping lanes and offering new feeder services along the Red Sea. Hestbaek explains that Folk’s role is part of a much larger development for the Kingdom. Logistics is a founding pillar of Saudi Arabia’s Vision 2030, designed to diversify its economy and create long-term career opportunities for Saudis. The country has a stated aim of becoming a global logistics hub and, through the Public Investment Fund (PIF) and other vehicles, has invested heavily in the development and digital transformation of ports and the wider logistics network across the country. For Hestbaek, Folk Maritime, a PIF company, has a crucial role to play in connecting regional markets to the Kingdom’s major trading hubs.

Folk’s feeder services will provide the first and last sea miles for cargo on its journey on the main container trade lanes, with Jeddah and Dammam each playing a major role in connecting global markets to smaller ports in Saudi Arabia, the Red Sea, and Arabian Gulf.

Listen to the full interview with Folk Maritime CEO Poul Hestbaek on the Seatrade Maritime Podcast

Its shortsea services will provide direct solutions between cargo owners and their customers within the Middle East and beyond. “That could be volumes that come from India or the Indian subcontinent going into the Middle East, but it could also be cargo that moves within the Middle East. We want to be a facilitator, working directly with the cargo owners to solve their transport needs,” says Hestbaek.

Beyond the domination of large container lines and alliances, Hestbaek sees scope for the rise of regional carriers, operating their own vessels under their national flags, and using their own containers to deliver goods. With those components aligned, regional carriers will be able to provide tailored and specialised services to customers, with experienced local teams who are closer to their customers.

Red Sea disruption
Folk was incorporated in 2023, announced its first services in March 2024, and celebrated its inaugural voyage in April 2024. However, the establishment and early development of the company has come at a time of disruption in the Red Sea, a key strategic area for its network.

Hestbaek acknowledges the impact. “We already have services in the northern Red Sea, but it is natural that the situation in the southern Red Sea means we have experienced some unforeseen challenges, so there are some parts of our strategy that we will have to delay. Eventually, we want to have full coverage of the Red Sea ports and connect them to the main liners via Jeddah.

The Red Sea disruption has also impacted the Arabian Gulf, where cargo displaced from the Red Sea is causing congestion. Folk Maritime’s partners are currently limited in their ability to provide transhipment services in Dammam, but once the geopolitical situation is improved, the company plans to mirror its Red Sea approach with full coverage of feeder and shortsea services in the northern Gulf.

The next step in Folk’s service development plans is to connect India to the Arabian Gulf and to the Red Sea. Timing will be an important part of Folk Maitime’s expansion. Hestbaek believes that the market is now calming after its rapid reconfiguration as networks adjusted to sailing around the Cape of Good Hope.

“The charter and S&P market has now plateaued. It’s on a high level, but it’s not increasing any further. The demand in the market seems to have been covered, and so the market has settled down.

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This article is part of the Seatrade Maritime Middle East Report 2024