Saudi Arabia’s investment in its maritime sector may lead to a shift in global trade logistics, reducing reliance on conventional routes. The Kingdom is positioning itself as a global logistics hub, enhancing its maritime infrastructure and prioritising sustainability, all thanks to its strategic location at the crossroads of international trade.
This initiative is a major component of Saudi Arabia’s “Vision 2030” economic diversification programme, which aims to reduce the Kingdom’s dependency on oil revenues.
Omar Hariri, the president of the Saudi Ports Authority, announced in August 2024 that, thanks to fruitful partnerships between his organisation and the private sector, investments in the Kingdom’s maritime industry have surpassed SR25 billion ($6.66 billion).
Hariri stated that partnerships with both domestic and foreign businesses have led to large investments over the last four years.
Pierroberto Folgiero, CEO of Fincantieri, one of the world’s largest shipbuilding companies, discussed how Saudi Arabia’s investment in maritime infrastructure is influencing the course of international trade routes.
“By expanding its shipbuilding capacity and enhancing its logistics infrastructure, the Kingdom can address global supply chain bottlenecks, strengthen its maritime influence, and foster resilience in international trade flows,” he said.
Folgiero stated that his company views this as an opportunity to leverage its shipbuilding and maritime technology experience, adding that Saudi investments in cutting-edge maritime infrastructure could open up alternate trade routes and reduce dependency on chokepoints like the Suez Canal.
“Investments in shipbuilding, ports, logistics, and shipping services have allowed the Kingdom to capitalise on its geographic advantages. Notable projects include the development of the King Salman International Maritime Industries Complex in Ras Al-Khair, set to become one of the world’s largest shipyards, and the modernisation of key ports such as the Jeddah Islamic Port and King Abdulaziz Port,” he said.
According to the CEO, Saudi Arabia is advancing its shipbuilding and maritime technology by forming strategic alliances with leading companies across the globe.
“These collaborations focus on transferring expertise and technology, accelerating the Kingdom’s evolution into an influential player in the international maritime and shipping sectors,” Folgiero continued.
He highlighted that a key component of Saudi Arabia’s maritime strategy is its focus on smart ports, which use automation, IoT, and AI. By streamlining trade, increasing transparency, cutting costs, and speeding up turnaround times, these technologies will make the Kingdom a desirable location for international shipping and logistics firms.
Fincantieri Arabia, a subsidiary specialised in shipbuilding, maritime systems and equipment, and naval logistics support services such as training and simulation, was established in May 2024.
According to Folgiero, this expansion will strengthen Saudi Arabia’s maritime presence internationally, localise technology, and create jobs.
National developments
The expanding maritime industry in Saudi Arabia will benefit more than just well-known foreign corporations.
Launched in 2024, Folk Maritime, supported by the Public Investment Fund, initially ran two routes but now operates twice as many. Poul Hestbaek, the former CEO of Hamburg Sud, heads the company.
He emphasised the Saudi government’s proactive measures to modify its regulatory structure and attract international investors to the sector, adding that his business is fully aligned with these initiatives to promote innovation in maritime commerce.
“As Saudi Arabia modernises its regulatory framework, we are leveraging the adoption of digitisation, automation, and AI-driven solutions to optimise port operations and streamline the logistics chain. This transformation is enhancing Saudi Arabia’s position as an attractive destination for international investors,” Hestbaek noted.
According to Hestbaek, his organisation contributes significantly to this change, particularly with its growing fleet and direct liner services along key routes, such as those connecting India with the Gulf and the Red Sea.
He also emphasises Folk Maritime’s contribution to increasing cargo efficiency on key trade routes, such as the Red Sea and the Gulf.
“As we increase regional shipping capabilities and expand our fleet, key economic indicators to watch include the growth in port throughput, the development of new shipping routes, and the rise in non-oil exports,” the CEO said.
Sustainable maritime operations
Hestbaek stressed that Saudi Arabia aims not only to grow the industry but also to ensure that its expansion is sustainable.
“We are aligned with Saudi Arabia’s net-zero carbon by 2060 goals, incorporating advanced green technologies into our fleet, using energy-efficient technologies to reduce emissions, and optimising fuel consumption,” he said, explaining how sustainability is at the core of his company’s operations.
Hestbaek highlighted Folk Maritime’s commitment to decarbonisation through adherence to global standards, prioritising International Maritime Organisation regulations, implementing alternative fuels, and substituting environmentally friendly vessels, such as the M/V Folk Jeddah, for older ones. The company has recently acquired 5,600 recyclable containers.
The maritime industry is constantly concerned about security, as evidenced by the Houthi-led attacks in the Red Sea. Hestbaek stressed Saudi Arabia’s multifaceted strategy for protecting shipping lanes from cyber and physical threats.
“The Kingdom works closely with international and regional partners to counter piracy and maintain secure sea routes in the Arabian Gulf, Red Sea, and beyond. Saudi Arabia has invested in state-of-the-art naval and coast guard assets, as well as enhancing port security to safeguard ships and cargo,” he continued.
According to the CEO, cybersecurity is a major concern for Saudi Arabia and Folk Maritime, and the company plans to protect its operations by working with domestic and foreign authorities.
“We are committed to safeguarding our fleet and digital infrastructure from emerging cyber threats, implementing cybersecurity measures such as secure communication channels, real-time monitoring systems, and advanced protocols for data protection and cargo tracking,” Hestbaek remarked.
Maritime tourism
There is also more to the maritime sector than simply moving cargo from one port to another. In line with Vision 2030’s objective of establishing Saudi Arabia as a global centre for tourism, Saudi gigaprojects like NEOM and the Red Sea are revolutionising the Kingdom’s cruise ship sector, according to Folgiero of Fincantieri.
“Futuristic cities like The Line and Sindalah Island, alongside the ecotourism focus of the Red Sea Project, offer bespoke and sustainable experiences that cater to the high-end travel market, sharpening Saudi Arabia’s competitive edge in the global tourism landscape,” he said.
To ensure the Kingdom takes full advantage of this, the sovereign wealth fund PIF-backed Cruise Saudi was established in 2021 to bring in one million passengers annually by 2035.
Additionally, by 2035, it aims to create 50,000 direct and indirect jobs in the cruise industry. In December 2024, Cruise Saudi launched its first ship, the Aroya, at Jeddah Islamic Port. The ship has 19 decks, 1,678 cabins and suites, and space for up to 3,362 passengers.
Saudi Arabia’s maritime investments are poised to reshape global trade logistics, offering new trade routes and boosting economic growth. By focusing on sustainability, technological innovation, and strategic partnerships, the Kingdom is diversifying its economy and enhancing its position as a leading global player in the maritime and tourism sectors.