CLDA Final Mile Fridays with Tom Jowers, ADL Final Mile
Imagine your biggest customer calls this afternoon with great news: They’re doubling their volume starting next week.
Do you celebrate, or do you panic a little?
Winning more business is exciting. But growth can also expose weaknesses that were easier to manage when a company was smaller. Processes get stretched. Owners become bottlenecks. Margins get overlooked. And a major customer can quickly become too large a percentage of the business.
On a recent episode of CLDA Final Mile Fridays, CLDA President Lorena Camargo sat down with longtime industry leader Tom Jowers to discuss what it really takes to build a business that is ready to scale.
Jowers has worked in logistics since 1992 and spent decades building and operating transportation companies, including serving as an operating partner at ADL before its sale to private equity in 2022. Today, he continues to serve as a regional president and assists with M&A activity.
His experience has given him a close look at what separates companies that simply get bigger from those that become stronger as they grow.
More Revenue Doesn’t Always Mean a Stronger Business
Revenue is one of the most visible signs of growth, but Jowers cautions owners against relying on the top line as their primary measure of success.
“I would rather own a $10 million company that’s making 15% in profit than a $50 million company that’s breaking even,” he said.
Revenue matters, but it only tells part of the story. Profitability indicates whether the business model is working, while cash flow determines whether the company can meet its obligations and continue investing in growth.
That same thinking should apply when evaluating new business.
Jowers recalled advice he heard years ago at a CLDA conference: “Not every customer is your customer.”
In customized logistics, every opportunity comes with different requirements. A new account may require additional routes, drivers, technology, management or infrastructure. Before chasing the revenue, operators need to understand whether the business fits their capabilities and whether they can service it profitably.
That is especially important when competing for RFPs.
Winning because you offered the lowest possible rate may increase revenue, but it doesn’t necessarily strengthen the business.
“We want to be the best-choice option, not the low-cost provider,” Jowers said.
When the Owner Becomes the Bottleneck
Many final mile companies are built around highly involved founders and owners.
Customers know they can call them directly. Employees rely on them when a difficult decision needs to be made. The owner knows the customers, the routes, the people and the history behind nearly every part of the operation.
That involvement can be a tremendous asset, until the business reaches a size where every decision can no longer flow through one person.
Jowers admitted this was something he had to learn himself.
As ADL grew, trying to solve every problem and make every decision became unsustainable. If the team was always waiting for him, he became the bottleneck.
His test for business owners is simple:
Can you leave for two weeks without worrying that your business will collapse?
If the answer is no, the company may still depend too heavily on its owner.
The solution isn’t simply handing work to someone else. Jowers emphasized that true delegation means giving employees the authority, tools and accountability they need to succeed.
That also requires owners to accept that their managers may occasionally make a decision differently than they would.
Sometimes they will make mistakes. That is part of developing leaders.
“Sometimes the worst decision is not making a decision at all,” Jowers said.
When employees are empowered to act, the organization can move faster and the owner can spend more time focused on strategy, customers and business development instead of being pulled into every operational issue.
Build Systems, Not Heroes
Every growing company seems to have a few people who can save the day.
It may be the dispatcher who remembers every route and customer requirement, the operations manager everyone calls when something goes wrong, or the owner who is available at all hours.
Those people are valuable, but a growing business cannot depend on individual heroes forever.
One of Jowers’ recommendations for companies preparing to scale is to “build systems instead of depending on heroes.”
Systems create predictability, something Jowers considers one of the defining characteristics of a strong business.
Customers should know what they are going to get. Employees should understand what is expected of them. Leadership should understand the company’s financial performance. And instead of constantly reacting to the same problems, the company should have processes designed to prevent them.
For final mile companies, where exceptions are part of daily operations, creating that consistency becomes even more important as volume increases.
Growth becomes much easier to manage when knowledge and decision-making live within the organization, not just inside the heads of a few key people.
The Risk of Too Much Business From One Customer
A major customer can help transform a final mile company.
As the account grows, the provider may add routes, bring on contractors, hire employees, expand facilities and create new processes around that customer’s needs.
But there is a risk that comes with that success: customer concentration.
“If one customer makes up 99% of your business, that’s volatile,” Jowers said.
A customer can change providers, issue a new RFP, encounter financial difficulties or change its logistics strategy. When too much of the company depends on one account, losing that business can have an outsized impact on the entire organization.
That doesn’t mean turning down additional volume from a strong customer. It means understanding the risk and continuing to develop other accounts while that customer grows.
Customer diversification helps make sure the loss of one relationship doesn’t threaten everything the company has built.
Diversify Without Trying to Be Everything to Everyone
The same thinking can apply to the industries a final mile company serves.
ADL built significant expertise in automotive logistics while also expanding into pharmaceutical, medical and other areas. But Jowers stressed that diversification shouldn’t mean chasing every possible opportunity.
The goal was to develop expertise in core areas rather than trying to become an expert in 15 different things.
For companies considering a new vertical, Jowers offered straightforward advice:
“Look at everything. Don’t say yes to everything.”
A new opportunity should make sense for the company’s capabilities, network and strategy.
Customized logistics is, by definition, customized. An opportunity that doesn’t immediately fit an existing network may still be worth exploring. But operators should understand what it will take to execute the business successfully before committing to it.
Strategic diversification can make a company more resilient. Trying to be everything to everyone can have the opposite effect.
Key Takeaways for Final Mile Leaders
For owners preparing their companies for the next stage of growth, Jowers’ advice comes down to several fundamentals:
- Know your numbers. Revenue growth matters, but profitability and cash flow tell you whether that growth is sustainable.
- Build leadership beyond the owner. Give your people the authority, tools and accountability to make decisions.
- Create systems that can scale. Don’t allow critical processes to depend entirely on one person.
- Watch customer concentration. A growing account is good news, but no single customer should put the entire company at risk.
- Be selective about new business. Not every customer or opportunity will be the right fit.
- Diversify strategically. Explore new opportunities without losing sight of the areas where your company can truly excel.
Getting Better Before Getting Bigger
There is no single formula for taking a final mile company from $10 million to $25 million or beyond.
But Jowers believes the fundamentals remain the same: Take care of your customers. Invest in your people. Know your numbers. Build systems. Take calculated risks. And stay humble enough to keep learning.
Every company will make mistakes along the way. What matters is whether those lessons are used to make the organization stronger.
Because the real test of growth isn’t how much new business you can win.
It’s whether your company is ready to handle it when you do.
As Jowers put it:
“Growth isn’t just about getting larger. It’s about getting better. And if you focus on getting better every day, the growth usually takes care of itself.”
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CLDA Final Mile Fridays brings together leaders from across the customized logistics and delivery industry to share practical ideas and real-world experience that can help members build stronger businesses and keep moving the final mile forward.
Join us every Friday at 10 a.m. Pacific / 1 p.m. Eastern on LinkedIn for a new conversation.
