Transport and logistics giant FedEx Corp. has named veteran executive Raj Subramaniam as the new president and CEO of its FedEx Express unit, the division that generates the lion's share of corporate revenues for its parent company, the firm said today.
Subramaniam, who is now the executive vice president, chief marketing and communications officer of Memphis, Tenn.-based FedEx Corp., will take over on Jan. 1, the day after current CEO David L. Cunningham retires.
The succession marks the end of a 36-year career at the company for Cunningham, and the next step in Subramaniam's 27 years with FedEx. He will be replaced in his mar-com role by Brie Carere, a more than 17-year FedEx veteran.
FedEx did not specify what Subramaniam's specific goals would be in his new position, but a page on the company's website states that "FedEx Express has a plan to improve profitability and secure the long-term viability of our business in the years to come." The unit's goal is to deliver $1.2 to $1.5 billion of improved annual operating profit for the segment in fiscal year 2020 compared to 2017, assuming moderate economic growth and current accounting rules and tax laws, FedEx said.
FedEx Express, the company's air and international unit, generated $36.2 billion in revenue in fiscal 2018, representing 55 percent of FedEx Corp.'s overall income and by far the largest single division. Smaller contributions came from: FedEx Ground (28 percent), FedEx Freight (10 percent), FedEx Services (3 percent), and other (4 percent).
"Raj's global vision and broad experience make him uniquely qualified to lead our largest operating company. We look forward to the continued growth of FedEx Express within our global portfolio as Raj takes on this critical role," David J. Bronczek, president and chief operating officer of FedEx Corp., said in a statement.
In recent months, FedEx has tweaked its strategy to devote more organizational resources to its fast-growing specialized logistics and e-commerce units and to expand the U.S. operations of its ground delivery unit, "FedEx Ground," to six days a week year-round to match rival UPS Inc.'s offering.
To help pay for those investments, FedEx has also recently increased its delivery surcharges on larger and heavier packages, and announced it would increase shipping rates for all FedEx Express, FedEx Ground and FedEx Freight services beginning Jan. 7.