Carol Tome : Another catalyst for growth, of course, is healthcare logistics. Couldn’t be more proud of the progress that we’ve made in this space. And we’re just getting started. There’s a huge opportunity for growth here around the world. And Kate and her team are doing a masterful job of leading us there.
David Vernon : And as you think about the OpEx that you’re putting in to offset some of the above the line sort of service costs. Is that sort of one time in nature? Is that just project-based work around implementing RFID in the facilities? Is there some cost drag there that that comes away, or is that just cost drag that moves on to the next initiative? I’m just trying to think from a puts and takes perspective.
Brian Newman : Now, some of the investments, international DAP for example, we’re investing in the first part of the year, that’ll start to pay back latter part of the year. And then the deployment of smart packs, smart facilities, that’s probably more of a payback in ’24 than ’23 as we phase, complete Phase 1, and start to move on to Phase 2.
Carol Tome : And to dimensionalize the investment that we’re making in smart package smart facility, it’s about $140 million of expense this year, which will not repeat the following year, and about $106 million of capital.
David Vernon : That’s super helpful. Thank you.
Operator: Our next question comes from the line of Ken Hoexter from Bank of America. Please go ahead.
Ken Hoexter : Hey, great. Good morning. Carol, great to hear the target to have the contract done by the end of July. I think last year we had talked to you, you weren’t even planning on sitting down early. So I think that’s encouraging to hear. Maybe you could talk a little bit about what the largest customer kind of represented full year for ’22, your thoughts? I know you talked about the pace of the loss of that business, but it sounds like it’s accelerating into ’23. Maybe you could talk a little bit about that in perspective of your countering SMB wins. And then on international to maintain that 21%, Brian, what’s the assumptions in there to maintain that level?
Brian Newman : Sure. On the Amazon front, Ken, we finished up a year ago at 11.7% in terms of the percentage of Amazon as a percentage of our business. That came down to 11.3% in last year. So it was really a decline of about 40 basis points. We’ll continue on a mutually agreed path to glide that business down in 2023, and that’s factored into our guide. So we feel good about being able to manage that down. On the international front, Ken, it was the second part of your question. So we’ve got an assumption that Asia comes back in the second half of the year. So that’s — they’re going through some challenges right now in the early part of the year. There was a two-week lunar holiday. We had some COVID challenges, particularly out of China.
So Kate and the team, they’ve done a masterful job in the fourth quarter and also in the beginning of this year in terms of pivoting our air network. I think Kate took down about 200 flights in Asia, which was really remarkable that they were able to do that in such a short period of time. So the air network, seeing a little bit of a rebound in China and then getting after the opportunities that we’re investing in. International, DAP was one I just mentioned and then going after the premium side of the market. So lots of encouraging optimism for the back half of the year.
