by Lloyd's List

30 May 2025 (Lloyd's List) - LAUNCHING a liner operator from scratch is no mean task in itself. Getting this off the ground at the height of the Red Sea crisis is even harder.

This was the brief facing Poul Hestbaek, chief executive of Saudi-based feeder operator Folk Maritime, who has overseen the line’s rapid expansion over the past 15 months.

Speaking in an exclusive interview with Lloyd’s List, the former head of the now Maersk-owned Hamburg Süd has no illusion about the strides his company has made in little more than a year.

But, as Hestbaek reveals, Folk Maritime’s aggressive growth strategy thus far is just the beginning.

Folk Maritime, which is owned by the Saudi Public Investment Fund, emerged in February last year as a feeder operator seeking to cash in on the Saudi ambitions of becoming a regional logistics hub under the country’s ‘Vision 2030’ initiative, which aims to reduce the oil dependency of its economy.

Despite still being in its formative stages, the Riyadh-headquartered company already operates four services connecting Saudi ports with hubs in the Middle East Gulf, Indian subcontinent and Red Sea.

This includes the line’s North Red Sea Service, run in partnership with French carrier CMA CGM, and its India Gulf Service, operated under another vessel-sharing agreement with Omani carrier Asyad.

While the major carriers have disappeared from the Red Sea, with mainline services rerouted around the Cape of Good Hope, Folk Maritime has been able to capitalise and plug at least some of that gap to ensure southern Saudi Arabia maintains network coverage.

Today, Folk Maritime has a workforce of around 100 on its books, at sea and on shore — a feat Hestbaek says is quite remarkable, considering when he took up his role at the start of 2024, the company was operating with a skeleton staff of just six employees.

“When I joined, the sextet that was hired, we had nothing. There were no shipping people that had any knowledge of the goals, we had not established any procedures or processes, we had not acquired software, we had no vessels, we had no plans in place,” he told Lloyd’s List.

First step was to build the organisation’s capacity and capabilities from the ground up — a task Hestbaek said sounds easier said than done.

“We managed to get that up and running, launch four services — which is quite amazing — acquire the vessels that fitted what we needed, order 5,700 containers, and build up a liner organisation with agency representation across our regions.

“I think we have achieved quite a lot, considering that’s only one year, and we started basically with an empty slate.”

However, one of the biggest achievements in Hestbaek’s view is how Folk Maritime has a become a company that has quickly gained the respect of its peers.

“There’s nobody who is not willing to deal with us. We have managed to display so much confidence that we could actually partner up with some of the big blue chip lines, like CMA

CGM, but we’re also working with other big mainline operators.

“They know we are reliable, punctual and committed. We pay on time, which is very important in shipping, and we already have a pretty good reputation, which usually takes years to build up. The foundation we have built in the past 12 months is very solid, and it’s a good launchpad for all the things to come in the next five, six years.”

While impressive, not every new carrier has the backing or influence of Saudi PIF. But although Hestbaek admits that Folk Maritime has had the advantage of PIF’s support in its early stages, the company now operates independently, generating its own cash flow and maintaining financial discipline, just like any other ambitious carrier.

“PIF is an immensely qualified organisation of high-profile people. When it was decided to build Folk Maritime, it was also decided to build a certain equity portion for the company — and, once that equity portion had been delivered, then we have had to paddle our own canoe.”

He is also keen to emphasise that unlike some state-backed ventures, Folk Maritime does not have access to an infinite money pot.

“[PIF] are professional investors, and they have their strategy, and we are delivering on that. They do not expect us to come back and ask for more [money]; it would be highly embarrassing for me personally.

“It’s not like we have a rich uncle with an open telephone line to an endless source of funding. That’s not what I’m seeing. That’s not how it is — and not how it should be,” stressed Hestbaek.

Taking control

The fleet composition of Folk Maritime is also not what one might expect of your typical regional player.

While most in the sector venture into the charter pool for tonnage, Folk Maritime has opted to take a somewhat non-conventional approach of targeting majority vessel ownership.

Earlier this month, it completed the purchase of three vessels set for deployment in the coming weeks. The 1,868 teu Folk Dammam, 702 teu Folk Yanbu and 1,118 teu Folk Jubail, all registered under the Saudi flag, will become the third, fourth and fifth vessels owned by the group, which now boasts an operational fleet of eight, including three further chartered ships.

Hestbaek said its latest fleet additions aligned with the group’s strategy to have advanced oversight of its operations, which was only possible through the full ownership of its vessels. This level of control, he said, is “very important”, particularly in its “volatile” operating region.

“In regional trades, normally players may have zero owned vessels, or a relatively low share of their own vessels, depending much more on the charter market,” said Hestbaek.

Folk Maritime aims to have a minimum 60% ownership share of its fleet portfolio.

“We want to be able to control those vessels in case there is a scenario that requires that [control].

We will also have a relatively high share of our own container fleet for the exact same reason.”

While this independence is crucial, Hestbaek is also of the opinion that carrier partners are crucial to becoming a successful regional player.

“Regional container shipping is a very margin-thin business. If you don’t have your costs right, then it’s going to be hard for you to pay your bills. Therefore bundling up with partners to fill bigger ships, thereby driving down unit costs, is something that every player in any trade — but particularly the regional trades — is focused on,” he said.

This will allow Folk Maritime to operate vessels with a competitive cost per unit, he added.

Hestbaek did not rule out partnering with any line, even those he sees as in direct competition, such as Abu Dhabi Ports’ carrier arm Global Feeder Shipping or Emirates Shipping Line.

“There will be many partnerships. I cannot imagine how there are many more players in this region that we have not yet partnered with, but I’m sure that within the next couple of years, there will be more. That’s the normal nature of liner shipping in regional trades.”

While vessel-sharing agreements and slot partnerships are an essential component of Folk Maritime’s strategy, Hestbaek says just as key is capitalising on cargo owners’ demands for tailored solutions and flexible, direct services. This, he said, is what differentiates itself and other regional players from the dominant global operators, who are focused on size and volume.

“That means most of their business is running automated, and there will be fewer tailor-made opportunities, because simply for big, big organisations, it does not pay off. It pays off to be standardised. That will give some openings for the regional trades where you have customers who needs some unique solutions.”

Next moves

The next step for Folk Maritime is to expand its network. With coverage in the north and central areas of the Red Sea, there is scope to expand in the south, but there is still the issue of safety and the threat of Houthi attacks in the region.

“Of course, due to the geopolitical situation, it’s a very fragile part of the world — but all is going well and, with the assurance that our crew, vessels and cargo are safe, then we plan to expand something in the southern Red Sea in the not too distant future,” said Hestbaek.

Hestbaek will, though, take confidence from the fact one of its services, the India Red Sea Service, has been sailing from Jeddah through the area every other week to India since last year without incident.

Folk Maritime has been kept updated regularly on the ongoing situation by intelligence personnel and follows strict operational procedures when passing the Bab el Mandeb, according to Hestbaek.

“We’re not underestimating the risk here. For us, of course, it’s the safety of the crew and their wellbeing that has the highest priority. But also we have to bear in mind that there hasn’t been any accident or any attack on commercial ships for a very long time now.

“I’m not saying that it’s safe, but I’m saying that by abiding to very strict security protocol, we can cross with a very high degree of safety that allows us to operate in these waters.”

Folk Maritime also plans to launch an feeder network centred out of Dammam in the Arabian Gulf, while long term there is scope to expand the line’s reach further into Southeast Asia and east Africa.

“Our long-term vision is that when we hit 2030, we have a market share of around 15%-20% in this part of the world, which is more or less equal to the trade size of Saudi Arabia.

“That means we will have to grow many times from where we are today, but we are building based on that long-term objective.”

To grow, Folk Maritime will, of course, soon be in the market for fresh tonnage.

“We will both charter or purchase. In the long run, it is also our ambition to order new ships purpose built for that [particular] trade.

“We will have to go up in size, probably more in the charter market. But we do not envision growing up in the big, big sizes that serve the China market. That’s a different ballgame.”

At this stage, newbuilds are off the table, however, Hestbaek made it clear that this will come when the timing is right.

“We’ve just started discussing it [newbuilds], but if you order a ship today, you won’t get it until 2029. So it’s a long lead time.

“We are starting to follow the market very carefully. We are starting to evaluate what our vessels will look like, size, type, etcetera. We are still some time away from ordering, but the aspiration is very clear.

“Still, we’re going to grow very aggressively in the next couple of years. There’s a lot more to do, but we have started to build most of the foundations we need for the years to come.”