In the ever-evolving landscape of global shipping, the feeder shipping market presents substantial growth opportunities, with Saudi Arabia poised to take a leading role by 2030. This projection is highlighted in a recent report by the management consultancy firm Arthur D. Little, which delves into the emerging opportunities within the feeder shipping segment. Feeder shipping involves short sea, last-leg, or regional journeys that rely on smaller feeder vessels with a capacity of less than 3,000 TEU.
The report identifies regions like the Middle East as potential leaders in feeder shipping, attributing this to factors such as strategic location and port investments. With the feeder market expected to reach a staggering $451 billion in revenue by 2030, the Middle East is set to account for a significant portion of this growth. Currently, the feeder market in the Middle East, East Africa, Turkey, and South Asia is valued at $8 billion.
Saudi Arabia, in particular, is well-positioned to benefit from this trend. Government policies aimed at economic diversification are playing a crucial role in driving Saudi Arabia's growth in the feeder shipping sector. The report suggests that Saudi Arabia could capture up to 45 percent of Red Sea feeder trade and 35 percent of Gulf feeder trade. This is in line with projections that regional container volumes will reach 41 million TEU by 2030.
To capitalize on these opportunities, Saudi Arabia has invested in a new shipping line, Folk Maritime. Owned by the Saudi Public Investment Fund (PIF), Folk Maritime targets feeder shipping in the Red Sea and Arabian Gulf regions. Last month, the company celebrated the acquisition of its second container ship, MV Folk Jazan. Built in 2008, the vessel has a capacity of 2,015 TEUs and will operate out of Jeddah Islamic Port, serving routes across the Red Sea and Arabian Gulf.
Paolo Carlomagno, Partner at Arthur D. Little, commented on Saudi Arabia's unique position in the feeder shipping market. He stated, "Saudi Arabia sits at the intersection of macroeconomic shifts in global trade, regional port infrastructure growth, and heightened investor appetite for logistics assets. Its ability to combine geographic proximity to high-growth corridors with government-backed investment strategies creates a uniquely scalable feeder shipping environment that few markets can match."