Folk Maritime eyes India services as Red Sea disruption delays strategy

Folk Maritime is planning to launch services connecting India to the Middle East Gulf and Red Sea in the fourth quarter 2024, CEO Poul Hestbaek told Seatrade Maritime News in an exclusive podcast interview.

“We have seen the Indian Government making trade agreements with most of the countries in the region, and it’s clear that India is already a powerhouse,” said Hestbaek.

The new services back the company’s expectation that near-shoring and friend-shoring will continue to increase across supply chains. “We are seeing this trade shift in this region… India is becoming a first supplier of many, many goods that have been produced elsewhere in the past. The short sea trade focus for Folk will drive us much faster, I believe, than the feeder requirements,” said Hestbaek.

Attacks in the southern Red Sea and the resulting vessel diversions have delayed some of the young company’s initial strategy, but it remains committed to expanding its services from the northern Red Sea to all ports in the area, connecting to mainline container services via Jeddah.

“We have a service that connects Jeddah with the northern Red Sea, and we have a service connecting Jeddah with Port Sudan. This is currently only feeder cargo, but over the coming months, we want to introduce shortsea, which we see as an equally strategic part of our business, offering direct services to the cargo owner,” said Hestbaek. The network reach will expand as the geopolitical situation allows, he added.

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“Step two is to introduce the shortsea concept with Folk cargo moving in Folk containers on Folk vessels," said Hestbaek. The same concepts will also be applied to the Middle East Gulf, with Dammam as the hub connecting to the main trades.

Hestbaek also shared Folk’s fleet development plans. The company currently intends to order its own ships in three to four years’ time with tonnage customised for trades around the Middle East. In the meantime, its chartering policy will ensure that ships joining the fleet are more efficient than those they replace. 

“We believe that by having some unique designs and some unique features on the feeder and short sea vessels that we will be operating, we can gain on cost competitiveness,” said Hestbaek.

The reason for not ordering immediately is uncertainty over future fuels, and a desire to develop fuel efficiency technologies.

“I understand we cannot make fossil fuel become green, but we can bring it much, much closer to clean. I think that there's going to be some movement over the next couple of years, that we're also going to invest in, as to how we further improve and reduce the carbon footprint from normal combustion engines,” said Hestbaek.

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With the backing of Saudi Arabia’s Public Investment Fund (PIF) and a clear role in the Kingdom’s Vision 2030, Hestbaek believes that Folk can take a longer-term view of the market. The return on investment for PIF is not just the financial benefit of a healthy company, but the geopolitical advantage of a logistics structure anchored in Saudi Arabia, connecting it to the whole region, he added.

The full interview with Hestbaek is available as a podcast at Podcast: Building a new regional shipping player with Folk Maritime CEO Poul Hestbaek