Coffee with Folk Maritime CEO Poul Hestbaek: EnterpriseAM sat down with Poul Hestbaek (LinkedIn), CEO of Folk Maritime, on the sidelines of this year’s TransMea forum in Egypt. As the young PIF-owned logistics outfit expands its regional presence through a regional shipping line and national feeder network, we talked to Poul about their ongoing projects in the Kingdom and how the firm is navigating geopolitical tensions and global trade uncertainty.

EnterpriseAM: What are some milestones your company is striving toward over the coming year?

Poul Hestbaek (PH): Folk Maritime was founded to achieve three core pillars over the next three years.

The first pillar was to develop a comprehensive feeder network to connect all ports along the Red Sea, which we had just accomplished. Now, we’re focused on stabilizing this network and bringing the right capacity into core areas, like Jeddah and Dammam, aligning with the nation’s 2030 vision to turn these two areas into logistics hubs.

The second pillar is to build up our own regional shipping line operation, a process that we started at the end of last year. Our objective is to continue to grow this to become our main business by 2028, using our own vessels and containers. To achieve this, we first need to secure more ships. We are on a good path, but there is still a long way to go.

Under the third pillar, we want to be fully equipped to help secure the Kingdom’s supply chains in case of any security situation or disruptions, such as a future pandemic or the closure of key routes like the Red Sea or the Strait of Hormuz.

To achieve the last two pillars, the company must expand its owned fleet by acquiring its own ships and its own containers. The milestone associated with this pillar by 2028 is to have more than double the current fleet of five Saudi-flagged ships and to double the size of the container fleet.

Another important area we’re focused on — one I feel strongly about — is talent development. This will be key because container shipping was not a core industry in Saudi Arabia, and it's not easy to attract talent to an industry that not many know about.

That’s why we want to train a new generation of workers. We want to ignite their passion for logistics to become the new managers of the future, and I feel very strongly about this because the Kingdom is full of very well-educated and eager-to-learn young Saudi men and women.

E: How is Folk Maritime approaching vessel acquisition, especially regarding new builds?

PH: There are three ways that you can acquire vessels — chartering, purchasing secondhand, or building new. We currently have five secondhand vessels in our fleet. Since building a new ship takes up to four years from the time of order, our current focus is more short-term, seeking solutions within the next one to three years, which new builds cannot address.

While we are currently focusing on the immediate needs, we are not ruling out options and are conducting preliminary studies for long-term projects. For example, we are looking at long-term options to align with the green agenda, as newer, more modern vessels offer the latest technology, maximizing fuel efficiency and minimizing carbon footprint.

EnterpriseAM: How do you expect the volatile global trade environment to impact the local logistics sector?

PH: We are seeing a shift where customers are demanding supply chain sustainability and requiring a Plan B or a "backup offer," a consideration often neglected by large global industries in the past. If you go back two or three years, none of the big guys considered a Plan B. You can see this when you look at the global auto industry. Building a car requires parts that come from 100 different locations, but big auto players never considered a Plan B for their supplies, because at that time, there were no issues.

We are also starting to see more near-shoring and much more friend-shoring. Customers are prioritizing placing orders in locations that offer sufficient stability, at least towards them. There may be issues in another direction, or to another country, but at least they can be assured that they will get the products they want.

This effort to simplify supply chains is eventually creating more regional trade, which we view as positive. Folk Maritime hopes to gain a stronger foothold as more goods move internally within the region.

Furthermore, when the trade situation becomes "blurred," customers increasingly demand assurance and visibility. To meet this demand, Folk Maritime is the only regional shipping line that places trackers on all our containers, providing unique visibility. Customers can monitor the exact location of their cargo on their mobile phones — whether it is at a port or on a truck — allowing for better last-minute planning and cost savings.

EnterpriseAM: What are some exciting developments you see happening in the regional logistics sector, and how is your company capitalizing on them?

PH: We are excited about two main developments. We observe India increasingly becoming a regional powerhouse, producing sophisticated goods demanded across the Middle East, Africa, and East Africa. This is a positive near-shoring development, giving customers shorter lead times.

We are also excited by Saudi Arabia’s vision to develop a Red Sea logistics hub in Jeddah. Scheduled to be operational within five to six years, this taxfree zone is designed to bring customers from the Red Sea rim to store their cargo, perform value-added services, and ship products via various means (air, sea, pallet, box).

We believe this hub will democratize shipping by giving smaller importers increased access to Saudi logistics markets. Right now if you're sitting in Sudan, or you're sitting in Ethiopia, only large-scale importers can feasibly bring in a full container of goods, whereas if you are a small importer with a unique idea, then booking a whole container isn’t an option. That said, developing a regional logistics zone – linking to the Red Sea periphery – will allow for shipments to be sliced up into smaller packages.

This increase in intra-regional trade also serves a geopolitical purpose, as "the more we trade together the less we fight," helping make the Red Sea rim countries a safer place.

EnterpriseAM: What regulatory or policy shift would you like to see to support more growth in the region’s logistics sector?

PH: It’s important to increase microfinancing initiatives, as we are seeing a lot of innovative and idea-driven individuals who are lacking the funding. Financing on a micro-level can help close that gap, catapulting growth in the region.

The government should also continue efforts to streamline regional supply chains. Having a logistics framework, including integrated customs and regulations, can streamline regional supply chains. It's not just a matter of whether the regulation has to change, but it's also the way that we approach regulation. That said, we need to make these systems more digital to encourage seamless trade.