STORY: Shares of FedEx rose as high as almost 5% Tuesday morning, after the company named its operating chief, Raj Subramaniam, as its new CEO.

"We are an essential service."

The 54-year-old, who will start in the new role on June 1, joined FedEx in 1991 and is also a company director.

He replaces FedEx founder Fred Smith, a former U.S. Marine who started the global delivery conglomerate with more than a dozen planes in the 1970's.

The company said Smith will transition to the role of executive chairman, overseeing sustainability, innovation, public policy and other global issues.

Subramaniam moves into the chief executive role as FedEx faces mounting competition from historical rival UPS and former customer Amazon.

Higher labor costs and internal missteps have weighed on margins at FedEx, while UPS has sharpened its operations.

Earlier this month, FedEx posted lower-than-expected quarterly earnings, and said staffing shortages were hurting profits and delaying deliveries.