diff --git a/Dockerfile b/Dockerfile
index 47061a6a355..95091022177 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -3,11 +3,6 @@
 FROM debian:jessie
 MAINTAINER Open Knowledge
 
-ENV CKAN_HOME /usr/lib/ckan/default
-ENV CKAN_CONFIG /etc/ckan/default
-ENV CKAN_STORAGE_PATH /var/lib/ckan
-ENV CKAN_SITE_URL http://localhost:5000
-
 # Install required packages
 RUN apt-get -q -y update && apt-get -q -y upgrade && DEBIAN_FRONTEND=noninteractive apt-get -q -y install \
 		python-dev \
@@ -17,6 +12,15 @@ RUN apt-get -q -y update && apt-get -q -y upgrade && DEBIAN_FRONTEND=noninteract
         git-core \
 	&& apt-get -q clean
 
+# Define environment variables
+ENV CKAN_HOME /usr/lib/ckan/default
+ENV CKAN_CONFIG /etc/ckan/default
+ENV CKAN_STORAGE_PATH /var/lib/ckan
+
+# Build-time variables specified by docker-compose.yml / .env or
+# docker build . -t chan --build-arg CKAN_SITE_URL=http://localhost:5000
+ARG CKAN_SITE_URL
+
 # SetUp Virtual Environment CKAN
 RUN mkdir -p $CKAN_HOME $CKAN_CONFIG $CKAN_STORAGE_PATH
 RUN virtualenv $CKAN_HOME
diff --git a/contrib/docker/ckan-entrypoint.sh b/contrib/docker/ckan-entrypoint.sh
index ab9d78e0952..d15a7e3faa9 100644
--- a/contrib/docker/ckan-entrypoint.sh
+++ b/contrib/docker/ckan-entrypoint.sh
@@ -65,6 +65,9 @@ if [ ! -e "$CONFIG" ]; then
 fi
 
 # Set environment variables
+echo "SQL_ALCHEMY_URL is provided to entrypoint as $CKAN_SQLALCHEMY_URL"
+
+
 if [ -z "$CKAN_SQLALCHEMY_URL" ]; then
   if ! CKAN_SQLALCHEMY_URL=$(link_postgres_url); then
     abort "ERROR: no CKAN_SQLALCHEMY_URL specified and linked container called 'db' was not found"
@@ -75,6 +78,7 @@ if [ -z "$CKAN_SQLALCHEMY_URL" ]; then
     export PGDATABASE=${DB_ENV_POSTGRES_DB}
     export PGUSER=${DB_ENV_POSTGRES_USER}
     export PGPASSWORD=${DB_ENV_POSTGRES_PASSWORD}
+    echo "PG password is $PGPASSWORD"
 
     # wait for postgres db to be available, immediately after creation
     # its entrypoint creates the cluster and dbs and this can take a moment
@@ -90,7 +94,7 @@ if [ -z "$CKAN_SOLR_URL" ]; then
     abort "ERROR: no CKAN_SOLR_URL specified and linked container called 'solr' was not found"
   fi
 fi
-    
+
 if [ -z "$CKAN_REDIS_URL" ]; then
   if ! CKAN_REDIS_URL=$(link_redis_url); then
     abort "ERROR: no CKAN_REDIS_URL specified and linked container called 'redis' was not found"
diff --git a/contrib/docker/docker-compose.yml b/contrib/docker/docker-compose.yml
index e883e33d222..76c2584a389 100644
--- a/contrib/docker/docker-compose.yml
+++ b/contrib/docker/docker-compose.yml
@@ -3,30 +3,45 @@
 # able to connect to the DB, then most likely the DB has not
 # started up quickly enough. Just do "docker-compose up ckan"
 # again to retry
-ckan:
-  container_name: ckan
-  # Note, if you are working on CKAN core, change this to
-  # build ../../
-  image: ckan/ckan:latest
-  links:
+version: "3"
+services:
+  ckan:
+    container_name: ckan
+    build:
+      context: ../../
+      args:
+        - CKAN_SITE_URL=${CKAN_SITE_URL}
+    links:
       - db
       - solr
       - redis
-  ports:
+    ports:
       - "80:5000"
-  environment:
+    environment:
+      - CKAN_SQLALCHEMY_URL=postgresql://ckan:${POSTGRES_PASSWORD}@db/ckan
+      - CKAN_SITE_URL=${CKAN_SITE_URL}
       - DB_PORT_5432_TCP_ADDR=db
+      - DB_PORT_5432_TCP_PORT=5432
       - SOLR_PORT_8983_TCP_ADDR=solr
+      - SOLR_PORT_8983_TCP_PORT=8983
       - REDIS_PORT_6379_TCP_ADDR=redis
-
-db:
-  container_name: db
-  build: postgresql/
-  
-solr:
-  container_name: solr
-  image: ckan/solr:latest
-    
-redis:
-  container_name: redis
-  image: redis:latest
+  db:
+    container_name: db
+    build:
+      context: postgresql/
+      args:
+        - POSTGRES_PASSWORD=${POSTGRES_PASSWORD}
+    ports:
+      - "5432:5432"
+    environment:
+      - POSTGRES_PASSWORD=${POSTGRES_PASSWORD}
+  solr:
+    container_name: solr
+    image: ckan/solr:latest
+    ports:
+      - "8983:8983"
+  redis:
+    container_name: redis
+    image: redis:latest
+    ports:
+      - "6379:6379"
diff --git a/contrib/docker/postgresql/Dockerfile b/contrib/docker/postgresql/Dockerfile
index 3b77d9a4e31..9d97cde79f2 100644
--- a/contrib/docker/postgresql/Dockerfile
+++ b/contrib/docker/postgresql/Dockerfile
@@ -6,5 +6,7 @@ RUN echo "host all  all    0.0.0.0/0  md5" >> /var/lib/postgresql/data/pg_hba.co
 
 # Customize default user/pass/db
 ENV POSTGRES_USER ckan
-ENV POSTGRES_PASSWORD ckan
+ARG POSTGRES_PASSWORD
 ENV POSTGRES_DB ckan
+
+RUN echo "Building postgres:9.6 with user $POSTGRES_USER, pw $POSTGRES_PASSWORD, db $POSTGRES_DB"