We have faced various challenges in the past few years, starting with the pandemic which resulted in shortages of raw materials and shipping availability and culminated in unprecedented inflation and higher interest rates. To withstand these headwinds, companies need to remain agile and anticipate the pitfalls of such adverse market conditions and also find and exploit the opportunities.
There has been a lot of discussion surrounding interest rates in the financial sphere in the past year, and with good reason. Interest rates affect every aspect of company strategy, so it is important for companies to rethink their level of working capital, capital expenditures and other investment strategies in light of the higher cost of capital. When interest rates rise, it is important to pay down debt. Companies also need to consider how they can better optimize their resources. How can you better leverage the assets you already have?
Fresh Del Monte is laser-focused on optimizing our use of capital and our operating assets. This extends to all areas of our business. We’ve rationalized less profitable product offerings, sold underutilized assets, aggressively taken market opportunities to leverage our shipping assets, and we’ve even reassessed our fertilizer and agrochemical applications to ensure we are as efficient as we can be in our use of raw materials. These actions helped us mitigate the impact of the current volatile market environment on our bottom line.
In this environment, efficiency and optimization of resources are critical. For us, that also means moving toward using data to help us better anticipate pricing and supply and demand. Better technology enables us to become smarter about how we operate. Instead of guessing, we’re using robust, real-time data to make better-informed decisions.
We recently leveraged our new shipping vessels to offer third-party freight cargo services. We significantly increased our commercial cargo revenues by offering reliable ocean freight services on our established routes from South and Central America to North America. We are now focusing on expanding our logistics services to inland transportation and warehousing capabilities in North America with our Tricont Trucking and Tricont Logistics companies. This initiative will help us expand our transportation business and leverage our asset footprint in Latin America and the United States, creating new revenue streams.
We also place a high value on our customer relationships, and we optimized our product offerings to nurture these relationships.
Finally, our most important resource is our people. Our worldwide Fresh Del Monte family has been instrumental to our success in navigating these tumultuous times. I am proud to be part of an organization with so many dedicated, talented individuals who are passionate about what they do. We have shown our commitment to the well-being of our people by continuing a hybrid work model wherever possible, and making sure each team member knows their contribution is valued and recognized.
Looking to 2023, I believe we are turning the corner, and I am starting to see more stability in the markets, beginning with supply chains. The elevated borrowing costs will continue for the foreseeable future so efficient use of funds will continue to be a priority, and we must be alert and proactive to other changes in the economic environment.