“On the foreign exchange rate, that is the fastest-increasing headwind, also a big headwind in quarter 4 that we had to overcome. The interest rate differentials keep widening versus the U.S. So we anticipate that headwind could further expand.”

In context

“he commodity side -- so let me take each bucket here. On the commodity side, we've seen some of our commodities annualized, as you said, and maybe even decrease. But we've seen the majority of our commodity basket still increase week-over-week month-over-month. So when you look at our overall commodity exposure, it is at this point in time stable to increasing. And our assumption going forward is at spot rates. So we assume stability within the commodity price environment versus current spot. We do not hedge our commodities. We are counting on our offsets within our total exposure between commodity FX and interest rates. So spot is the assumption we are using. And we still see slight increases week-over-week, month-over-month, certainly not to the tune that we saw at the beginning of '22. On the foreign exchange rate, that is the fastest-increasing headwind, also a big headwind in quarter 4 that we had to overcome. The interest rate differentials keep widening versus the U.S. So we anticipate that headwind could further expand. But our forecast is based on current spot rate, so the same methodology as on commodities. Transportation is a rollover versus the average price that we have paid in '21, '22. We see a little bit of easing here on the rate side. If you look at the load-to-driver ratio in the U.S., for example, that's down from a peak of 12 to now 4, which is more normalized. And some of the spot rates are coming down. That hasn't rolled over into contract rates at this point in time. If that happens, that could be a tailwind. Ocean freight, you see the number of ships waiting to get unloaded is decreasing. So that's normalizing. What I'll offer as the offset obviously is energy prices, fuel prices. So this one might offer some relief. But again, so far, we see this offset by fuel cost. Operator: Your next”