Security Clearance for Air Cargo

The Adidas company uses the air cargo mode of transportation to deliver its products to customers. The process involves security clearance, custom clearance, ground handling, taking off and landing, and getting to the destination. The company has a rigorous security control system in place, which is regulated by TRANSEC. The goods are screened at various stages during the journey from A to E, before being designated as SPX cargo. Custom clearance is an electronic process that assesses risk and provides automation within seconds of submission. Ground handling is outsourced to third-party agents or integrators like DHL. The company faces sustainability issues with air freight, which damages its brand value. To address this, Adidas plans to rely more on sea transportation, which emits less carbon dioxide and contributes to a more environmentally friendly approach.

logistics management
[Document subtitle]

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Contents
Introduction.................................................................................................................................................2
Company Overview.....................................................................................................................................2
Reasons for success in comparison to other company................................................................................3
Warehouse..................................................................................................................................................3
Transportation.............................................................................................................................................4
Air cargo journey of Adidas in the UK..........................................................................................................5
Getting to and from the airport............................................................................................................5
 Collection of goods.....................................................................................................................5
 Access to surface........................................................................................................................6
Clearance of goods.................................................................................................................................6
 Security clearance......................................................................................................................6
 Custom clearance.......................................................................................................................7
Getting through the airport..................................................................................................................8
 Ground handling........................................................................................................................8
Taking off and landing......................................................................................................................9
Getting to the destination......................................................................................................................9
How company can maintain its competitive advantage..............................................................................9
Suitability for other companies.................................................................................................................10
Concept of Sustainability...........................................................................................................................10
Conclusion.................................................................................................................................................11
REFERENCES..............................................................................................................................................12

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Introduction
It is being stated that the air cargo plays the crucial role in the process of the supply chain.
Further, the majority of the cargo is being carried underneath the cabin of the passengers.
Various airlines like the Alaska operates an aircraft that is known as Combi where the cargo is
shared at the deck along with the passengers. Some of the airlines such as DHL offers door to
door services, and some of the airlines include the cargos which are over-sized. The aircraft
which are being used to carry such over-sized cargos are like giant Antonov. Furthermore, the
airports offer a critical connection among the surface and the air modes. Further, the company
Adidas is being chosen in order to understand the process of air cargo in the UK. In the report,
the background of the company will be discussed along with its logistics and the transportation.
Then, the air cargo journey of the Adidas in the UK will be discussed, and the issue will be
identified accordingly. Moreover, it is being stated that the company uses the airport of East
Midlands as it is one of the top ten airports of air cargo in the UK.
Company Overview
Adidas is being stated as one of the greatest or the biggest manufacturer of sports across the
globe. Further, the company designs and produces the accessories and the apparels of sports. The
company has employees even more than 53,000 in more than 158 countries and generates
approximately 650 million products annually, and the sales are generated to £ 14 billion.
Furthermore, the aim of the Adidas is to offer various distinct products for the fashionistas or the
athletes and to achieve their aim the company uses the strategy of multi-branding. The Adidas is
multinational and a large company, so it has various multinational operations and the activities
(Adidas, 2017). The company believes that in order to succeed being global and international are

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the key factors which are to be considered. The Adidas is a strong competitor to Nike so, it
mainly focuses on the process of manufacturing, design, marketing and branding and the process
of transportation in order expand the operations of the company to a great extent to further attain
the sustainability along with the competitive edge and also attracting and retaining customers to
generate more sales. Further, the logistics and the transportation mainly air cargo of the Adidas
will be discussed.
Reasons for success in comparison to other company
It has been observed that the company Adidas succeeded more in comparison to another
successful company i.e. Nike because Adidas produce products according to the interests of the
customers and the sales revenue of the company are more as compared to the sales revenue of
Nike. Moreover, Adidas uses the transportation mode according to the expected time for the
delivery of products and also have the great strategies for marketing. Whereas, Nike produces
products in order to maximize the profitability and is not using the transportation mode
according to the credibility of the products and its demand.
Warehouse
It is being stated that the warehouse is the connection among the customers and the producers. It
is treated as the part of the Adidas system of logistics which further stores the products among
the point of the origin and consumption. Apart from this, the warehouse offers information to the
management on the current status. Furthermore, the Adidas utilized the leased type of warehouse
and is the further having an advantage of the rental for the space on short term basis while
utilizing it as the warehouse which is private in nature (Roscoe, S. and Baker, P., 2014).
Moreover, when the company took over the Rockport and the Reebok, the Adidas wanted to

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attempt for the synergies and the efficiencies which might be gained through consolidating the
inventory from the essential brands i.e. Taylor Made, Ashworth, etc. Further, the company
developed the new management system of warehouse, and it created the concept for the
30,000m2 which have the facility of complete automation.
Transportation
It is being observed that the Adidas uses mainly three types of transportation in the process of the
supply chain. The method of transportation through the air is being used because of its cost and
the great speed. The other method of transportation which is used by Adidas is the ocean freight
because it includes minimum or the cheap cost, but it takes a great time. Further, the other
method of transportation is through road and in includes medium cost and the speed in
comparison to the other methods. Furthermore, the Adidas uses the mode of transportation
according to the demand and the requirements of the customers and if the company has to
transport the goods from the factories of production to the oversea stores of retail then it mainly
uses the ocean freight because it includes low cost (Amaruchkul, et al., 2007). Also, it is being
observed that the factories of production of Adidas are mainly located in the Asia and stores are
separated across the globe and as the distance is very long, so the Adidas uses the air cargo in
order to carry the products. Furthermore, the Adidas team of logistics focuses on the high
emission of carbon and try to use the best mode of transportation which is environmentally
friendly which includes low cost and transport the goods within a short period according to the
needs and the requirements of the customers. It is being observed that the products which are
transported through air cargo results around 12 times of the emission of carbon as compared to
the transportation method by the ocean. It is stated that the emission of carbon is one of the

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major reasons which is causing global warming (Rushton, A., Croucher, P., and Baker, P., 2014).
Moreover, the Adidas uses the air cargo for the bulk orders of the products which have the great
demand in the market because some goods are required to be delivered at the faster rate, for
example, the events of sports (Wensveen, J.G., 2016). Therefore, the company tries to use the
best method of transportation mode to deliver the products timely. The Adidas is highly using the
air cargo as it delivers the product at a faster rate. The Adidas uses airport of East Midlands, UK
in order to transport the products.
Air cargo journey of Adidas in the UK
The airport of East Midlands is situated near the Donington Castle in Leicestershire among the
Nottingham and Derby. Furthermore, the airport is known as one of the busiest airports in the
country i.e. UK which is dedicated to the traffic of freighter (Dresner, M. and Zou, L., 2016).
Further, the air cargo journey of Adidas in the UK is discussed below-
Getting to and from the airport
 Collection of goods
It is being observed that the computerized systems such as EDI are being used in order to offer a
trace and track capability which further enables the operator to inform the consumer about the
status of the products during the process of transit. Further, networks include the essential
documents which are receipts of goods, custom invoices, and the entries. Moreover, when the
integrator is contacted by the shipper in order to arrange the goods transportation, the
information is keyed to the system about cargo. The shipper collects the goods from the shipper
directly by ensuring the efficient and the effective route (Fahimnia et al., 2015). The goods will
be transferred to the center of distribution along with the other goods and then they are carried to

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the airport of East Midlands, and the shipper will be responsible in order to label the goods along
with the note of consignment.
 Access to surface
The airport of East Midlands is situated in the UK, and it is two miles from the M1, 24 junctions
that is connected through the A453 by Nottingham. Further, approximately 10 percent of the
vehicles which are passing through the A453 connect from the J24 along with the A42 are
mostly vans and approximately 8 percent are the HGVs. Moreover, the airport of East Midlands
is close to the lines of stations of the railway at Nottingham, Derby, Leicester, etc. The services
of rail are being used by the workers, and the passengers who are traveling from and to the
airport and no air freight is being carried through rail (Fralich, R., 2016). Therefore, the air
freight is not carried through the rail due to various factors and they are being carried to the
airport of East Midlands through the other mode of transportation i.e. road.
Clearance of goods
The forwarders of the air freight and the integrators offer the documentation to the HMRC for
the clearance of customers.
 Security clearance
It is being stated that the country operates advanced and the rigorous controls of security which
are regulated by the TRANSEC. Furthermore, the outbound cargo of air can be considered as
secure if it will be originated from a secured source or it will be gone through the adequate
screening during the process of transportation or at the airport. Further different routes from A to
E are being used during the process of screening of the products. After the screening of the
goods, they are being designated as the cargo of SPX. Furthermore, when the goods are being
arrived at the airport of East Midlands, the operator of the aircraft develops the zone for loading

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the cargo. The below given diagram will help in understanding the complete process of clearance
of security through which the products of Adidas goes through (Hellermann, R., 2006).
Figure 1: process flow of procedure of security
 Custom clearance
It is being stated that the process of custom clearance is the complete electronic system of
processing that barrels around 20 million of imports and around 4 million declarations of export.
Furthermore, the declarations are being assessed through risk, and it provides around 97 percent
achieving clearance through automation within the few seconds after submission. Further. The
goods which are intra-EU are not subjected to the controls of EU, and for such goods, the form
of extrastat and intrastate are being filled which includes the value, weight and the nature of the

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goods (Mangan, J., Lalwani, C., and Lalwani, C.L., 2016). The diagram below will help in
understanding that how the products of the Adidas goes through the process of customs
clearance.
Figure 2: process flow of custom clearance
Getting through the airport
 Ground handling
It is stated that by relying on the operation’s scale, the integrators load the goods on the aircraft
and also uses the third party as the agent of the ground handling. Furthermore, the DHL barrel
the freight themselves and the TNT, UPS employ the GHA services like solutions of Aviation or
the Servisair.

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Taking off and landing
It is being stated the airport of East Midlands works 24 hours with no restrictions on the slot or
the runways. It is observed that the runway is mainly busy during the peak time i.e. late evenings
when the aircraft of the cargo arrives which overlaps with the last flight of the passengers.
Moreover, the DHL is having great series of the waves which starts with the flights to the airport
of East Midlands from the peripherals of the airport which also includes Northern Eire and
Ireland.
Getting to the destination
It is stated that in order to get to the destination, the airport of East Midlands uses the route
networks which provides a flight to 28 destinations directly across the coast of the Europe and
USA. Furthermore, the major integrators of the airport of East Midlands cover Europe, America,
and Asia. Moreover, the UK is sited in order to express the trans-shipments and the services
from the Europe to US (Vasigh et al., 2014). It is also being observed that when the goods are
shipped to the destinations, then it is the responsibility of the company to collect the goods from
the airport and then deliver them to the respective buyers to complete the process of the journey.
Therefore, this section shows that how the company Adidas goes through the complete process
of air cargo and the journey gets completed and what are the formalities are to be done by the
company in order to deliver the products to the customers by using the fastest mode and in a
given period.
How company can maintain its competitive advantage
The Adidas can maintain the competitive advantage by creating a great level of consumer loyalty
and the involvement by getting feedback from the customers which would further help the

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company to stay ahead of the competitors and create and maintain a long term relation with the
customers at the minimum cost. Further, the market research should be done on the regular
intervals in order to understand and analyze the changing perceptions of the customers.
Suitability for other companies
It can be stated that it will be suitable for other companies as well because these are the essential
things which helps the company to grow and they cannot ignore these factors as they highly
impact the overall functioning of the organization. For example, Nike is not using this strategy in
order to maintain the competitive edge and due to this the company is not able to understand the
changing perceptions of the customers and this is further impacting the sales revenues to a great
extent.
Concept of Sustainability
It is being observed that the company Adidas is facing the issue of sustainability while using the
air cargo. It is stated by the company that by using the mode of air cargo, the value of the brand
gets damaged to some extent. Further, the company believes more in using the sea mode of
transportation and the company is planning in order to use the mode of sea more in comparison
to the air freight as the goods as the value of the brand is less damaged through this mode.
Moreover, the company wants to be environmentally friendly, so the Adidas is trying to use the
sea mode of transportation as it will cause less emission of carbon and will be able to contribute
to towards the environment in order to reduce the global warming to some extent (McKinnon,
A., 2007). It is being observed that the various companies use the air cargo to deliver the
products at a faster speed in order to make the customers satisfied and attain the sustainability
and the competitive advantage for a longer period and completely ignores about the environment.

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Conclusion
It can be stated from the above-given information that the Adidas uses distinct modes of
transportation to ensure that the products are being delivered to the customers within a given
period and with reduced cost. Further, the journey of air cargo helps in understanding that how
the process works and how the goes company goes through various procedures and the
formalities which are to be done in order to complete the journey effectively and efficiently.
Moreover, it was being observed that the company Adidas is facing the problem of sustainability
as it is relying more on the air cargo and as the company wants to be environmentally friendly, it
is trying to rely less on the mode of air cargo as it includes high emission of carbon and this is
one of the reasons which is causing global warming and damaging our surroundings.

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