Chinese COSCO holding company has signed a contract for 11 new container vessels built for $1.51 billion, in their search to cut costs.

According to contract,  six boxships will be built by Dalian Cosco KHI Ship Engineering (DACKS) and Nantong Cosco KHI Ship Engineering (NACKS), Waigaoqiao Shipbuilding will be in charge of building three boxships, and the remaining two will be built by Dalian Shipbuilding Industry, COSCO said in a filing to Shanghai stock exchange.

The ships will each have capacity of 19,000 standard 20-foot containers, or TEUs. COSCO added that it would finance the deal from internal sources and bank loans. The ultra-large container carriers (ULCC) are expected to be delivered in 2018 within the framework of the shipping company’s fleet renewal plan.

According to a COSCO statement the new vessels will “improve the shipping capacity of the fleets of container vessels of the company and upgrade the fleets,”

“It’s all about liners trying to remain competitive by lowering their slot costs, which is the average cost to ship a container,” Lee Klaskow, a Bloomberg Intelligence senior analyst who follows freight transportation and logistics, said in an e-mail. “This has been mostly done by increasing the number of containers a vessel can hold. They are just following the lead of Maersk, which has had success with this strategy.”

Container shipping companies globally may be lucky to break even this year because of overcapacity and aggressive pricing, Drewry Shipping Consultants Ltd. said in July. That was a revision from an earlier estimate that the industry would record as much as $8 billion in profit for 2015.

COSCO is the latest shipping major to join the ULCC race that includes Maersk Line’s order for 11 container vessels with a capacity of 19,630 TEU each at Daewoo Shipbuilding & Marine Engineering (DSME), OOCL’s order for six mega containerships that will feature 21,100 TEU units, as announced by their builder, South Korean Samsung Heavy Industries (SHI), along with Japanese Mitsui O.S.K. Lines, Ltd. which has six 20, 000 TEU boxhips on order and French liner company CMA CGM which has ordered three 20,600 TEU boxships at Hanjin Heavy Industries.