While some of my bags are plaited or laced using long shoestring like leather laces, I also make handbags that are saddle stitched. Both the Bucky Bag and the Roll bag are hand constructed this way. The saddle stitch is created by using one piece of thread, with 2 needles attached to either end and a diamond point awl to help make the holes along the way. The piece of work is held in a stitching clam or pony. I use a French linen thread and give it a few pulls through a block of bees wax prior to stitching just like in the video below. This helps the stitches to stay in place and discourages thread rot.
Here is one of my favorite videos of an Hermes Artisan doing some saddle stitching in his workshop. This guy knows whats up.
I love working in this stitch. It's very tedious, which I love, (throw on my favorite Podcast, plug in my headphones and I could sit and do this for hours) but it also produces a durable item that will last for a very long time. And in the event that the thread does break down the line, it's easier to repair then a machine stitch.