Japan’s three largest container shipping companies, NYK, MOL and K Line, will merge to create the world’s fifth biggest box carrier following an agreement to form a company that will control seven percent of the market.

The new carrier will have some 110 ships and 1.4 million TEU.

With historically low freight rates, rising bunker fuel costs, overcapacity and low growth forecasts, many container shipping companies are struggling to survive. The three carriers were expecting significant losses for this year, according to a report in Bloomberg.

Through the newly merged company, the carriers are looking to make savings of more than US$1 billion a year, according to a report in the Wall Street Journal.

“The new company will combine loss-making entities to try and make a profit; to achieve that goal, there will be many cuts in the pipeline,” said Captain Pappu Sastry, Director of Accord Shipmanagement.

The merged company will need to be approved by regulators in China, Japan, the European Union, and the US, among other countries before it can begin operations.

Following Hanjin’s financial collapse in August, container carriers have been looking to alliances and mergers to mitigate the crippling financial losses affecting the industry.

Other movements in the industry this year include the merger of Hapag-Lloyd and UASC; CMA CGM Group’s acquisition of NOL in June; and the restructure of A.P. Moeller-Maersk A/S’s shipping operations to cut the world’s biggest container ship operator’s costs.