Jason Hollar: I wish I had more clarity. I would say that it’s a lot more stable than it has been over the last few years, and we have to break apart freight into the components. So within international freight that I believe was an anomaly that is unlikely to occur anytime soon, if ever again we need to be prepared for it. We have diversified our supply chain further as a result of the living through that. But where those costs are, they’re still elevated in certain areas, right. The main China to North America channels are much, much lower, but there is now a lot of sourcing through other parts of Asia that are higher than historical levels, but nowhere near the peaks. So we’re clearly seeing at least an 80% reduction of what those were at the peak.
And certainly much closer to pre-pandemic levels. So as it relates to international freight, it’s not my big worry at this point, and it’s one that we have to continue to keep an eye on and manage. The more elevated remains the domestic transportation it’s still €“ it’s also down from its peak, especially as it relates to anything related to diesel fuel. So that’s also off its peak, and we’re seeing certain pockets of improvement, but it’s still very elevated compared to pre-pandemic. And there, I have less confidence that it’s going to materially reduce from here. There’s a lot of inputs that go into transportation other than just diesel fuel. You have the equipment and the drivers all which are higher costs and they’re not expected to come down any time soon.
So I expect domestic transportation to be higher, longer, perhaps forever. And it’s why we need to have permanent pricing is because that component. But on the international freight side, that is why we are not pushing for faster price increases right now is because we believe that will be coming down on our P&L this next quarter. And as we get through fiscal 2024, those two lines, the price line and the cost line will finally intersect and we can see that that will be fully mitigated. Question, please.
Operator: Final question comes from the line of A.J. Rice calling from Credit Suisse. Please go ahead.
A.J. Rice: Yes, thanks a lot. I know growing specialty has been a priority for the company and this management team to set out. And you’ve mentioned that again today that you’re having progress there. I guess, can you just maybe tell us where you’re seeing success in the specialty area and is the plan progressing about as expected as it was talked about over the last year or so? Or is that an area not performance for you, or how would you describe that?
Jason Hollar: Sure. Yes, it’s absolutely meeting our expectations. It was a call out in terms of the broad volume that we had this last quarter. So we had strength across a number of many different categories and customers. We also called out double-digit growth within our sourcing and manufacturer services group which is a key component of the upstream elements of specialty. So the business is strong, it’s large, it’s growing nicely. We have €“ I think like the rest of the industry, biosimilars is a nice tail one that we’re seeing, not large enough to call out as an individual driver. Our 3PL business, especially with the regulatory approvals being a little bit more normalized is well positioned. And we’re continuing to invest in areas that will be growth opportunities in the future, whether that’d be cell and gene or just where value-based care is going.
We have our Navista TS platform, so we’re investing organically. And of course, within our inorganic, we’ve had a nice success with our Bendcare GPO and the investment in the MSO that I think has given us some additional opportunities to think about in the future as well. So not any 1 item to highlight, but there is strong breadth across many different pillars of the specialty business that we feel good is a very strong foundation and platform for future growth. I believe that was our last question. Yes. Thank you. And I’ll…
Operator: Yes, there are no further questions. So I will hand you back to host to conclude today’s conference.
Jason Hollar: Yes. Thanks. I appreciate that. Just to summarize real quick. I’m pleased with the continued stability in Pharma, as we just discussed here today. As well as the progress that we’re making in the medical business. We are committed to executing on our key priorities, including maintaining a relentless focus on shareholder value creation. So with that, thank you and have a great day.
Operator: Thank you for joining today’s call. You may now disconnect. Hosts, please stay connected on the line.
