Jason Hollar: Okay. I think I caught the essence at least part of that. So let me start. I believe part of the question was related to the next part of the inflation mitigation in the second half. I think the other question related to the corporate cost ramp. So let me start with the second part and then throw it over to Aaron for the first part. So as you think about the inflation mitigation and the next piece, there’s — it’s really the same for the second 50% as it was the first 50%. So in both cases, what we’ve seen is a moderation of the international freight. That spiked significantly about two years ago and started coming down about a year ago and got back down to pre-pandemic levels maybe six to nine months ago. So that has been — started to benefit us as we especially exited fiscal ’23.
So we did start to see that. It, of course, was inventoried into our inventory, capitalized those costs into our inventories. So it took a little while for that to benefit our P&L as a cost reduce. And along the way, in parallel with that, of course, we were pricing mainly on a temporary basis the first year for those increases as well as increases in other commodity costs and transportation, domestic transportation, increased labor and all those other costs. All those other costs have plateaued. They are not coming down. We don’t see any signs of them coming down. And so we have to price permanently for those items. We priced temporarily for the international freight. And as those costs on the international freight roll off, we need to maintain higher prices.
And so we are continuing to price and some of those temporary prices are now being rolled into the permanent prices. And so we would expect that as those contracts renew that we’ll continue to see more and more of that pricing recognized. I mean, to be very clear, we’re not rolling back prices. We’ve not increased prices beyond the point of our costs. At the 50% level, we’re still only being compensated for half of that overall gross impact that we’ve incurred. But over the course of this year, we do expect the international freight to come down. And by the time we exit fiscal ’24, the prices will continue to increase as we go through the course of the year as we get more of those contracts renewed permanently, and then that will cross over with the lower cost, and then we’ll exit in that manner at the end of the year.
Aaron, on the first question?
Aaron Alt: Sure. I think I heard a couple of different things, and so I’m going to answer the question I think I heard, and it goes something like this. So we did — I did comment earlier that in addition to the annualization of the core performance and indeed the inflation mitigation that Jason just touched on that there was $60 million of other benefit coming over the course of the year really driven by the three other pillars within the Med Improvement Plan, the contribution of the growth businesses, the simplification and the Cardinal Health brand work. As I was touching on, that work progresses over the course of the year, and we’ve seen more benefit towards the back half of the year. I want to emphasize the simplification efforts.
Steve and the team are working really hard at that every day. We just see the benefit coming more in the back half. The growth businesses are making good progress. They have some seasonality as well. They are certainly a strong contributor to the additional $60 million over the course of the year. And then Jason has already touched on Cardinal Health brand, so I won’t go there.
Jason Hollar: Next question please, operator?
Operator: The next question comes from Daniel Grosslight of Citi.
