Ports are critical components of the freight transportation network and serve as gateways for the movement of international (imports and exports) and domestic goods between navigable waterways and landside transportation systems, such as the Interstate highway system or the national rail network. For the purposes of this report, we define a port as the area “inside the gate” and under the control of the local port authority or marine terminal operator, where cargo is loaded and unloaded to and from ships. We refer to a “port complex” as encompassing one to two ports and the nearby roadways, rail, bridges, and intermodal facilities (i.e., connectors) on which cargo arrives or departs the port. Major West Coast ports—Los Angeles, Long Beach, Oakland, Tacoma, and Seattle—have historically handled about half of the nation’s containerized cargo (see figure 1) and all of these ports have projected increasing volumes. For example, the regional government for Southern California, where the nation’s largest port complex is based, has forecasted that the Los Angeles and Long Beach ports will handle approximately 40 million TEUs by 2035, more than two times the cargo handled today. Though cargo volumes at West Coast ports are expected to increase, the share of total cargo handled by West Coast ports has declined slightly in recent years as Gulf and East Coast ports gained market share. Cargo moving through ports is inherently intermodal. Efficient freight movement depends upon the condition of intermodal connections. Port connectors include transportation infrastructure such as roads, railways, and marine highways that connect the port to major trade corridors and allow freight to transfer from one transportation mode to another (e.g., from a ship to a truck). The movement of cargo through ports involves multiple entities, public and private, which compete with one another (ports against other ports, terminals against other terminals, etc.) and coordinate with one another (terminals with truckers and rail carriers, etc.) for shipping business and to make key infrastructure investment and operations decisions. See appendix II for a description of the key entities’ roles and how they fit in the end-to-end sequence of processes and network of companies involved in the production and distribution of goods that make up supply chains. At 29 West Coast ports—including the ports of Los Angeles, Long Beach, Oakland, Seattle, and Tacoma—the employment requirements and responsibilities between terminal operators and labor are outlined in one contract negotiated between the PMA—which represents marine terminal operators and ocean carriers—and the ILWU—which represents approximately 14,000 registered workers and another 7,000 non- registered workers eligible for employment at marine terminals. The most recent contract was finalized in February 2015 after protracted negotiations that began in May 2014 on a contract that was set to expire on July 1st of that same year. Historically, U.S. terminal-labor contract negotiations can be contentious and lengthy. In some cases, contract negotiating difficulties can effectively shut down port operations. Global shipping has changed over the past decade in several fundamental ways as ocean carriers have attempted to reduce their costs. These global shipping changes can impact how cargo is moved through a port. Increased ship size: Over the past decades, many ocean carriers decided to order larger container vessels to meet demand spurred by growing Asian economies, to capture economies of scale made possible by advances in fuel efficient engine technology, and to maintain market share and presence. The largest vessel to call on West Coast ports in 2016 could carry nearly 18,000 TEUs whereas in 2005, the largest vessel was roughly half as large. These larger vessels are longer, wider, and taller. Port terminal infrastructure— crane heights and reach, berth depth, and other considerations, such as the availability of truck chassis—the truck trailers that are used to carry shipping containers—must be adequate to receive these larger vessels. See figure 2 for an illustration of the growth in vessel size since circa 1985 with a Boeing 747 included for scale. Formation of shipping alliances: Ocean carriers have formed alliances as a strategy to contain costs and offer more competitive services. These alliances allow for cargo booked with one carrier to be transported by another alliance carrier’s ship. Shifts in these alliances can result in vessels calling on different ports and terminals, depending on obligations under alliance agreements. There are currently four broad alliances which transport about 80 percent of the U.S. containerized cargo. Changing ownership structures: Historically, ocean carriers owned not only the vessels, but also the cargo containers and the truck chassis that transport containers to and from the vessels. Previously, chassis would be stored, maintained, and repaired (by labor) within the terminal gates. Before leaving the terminal, labor would also conduct a chassis safety, or “roadability” inspection. In an effort to keep their costs low in response to the global recession in 2007-2009 and to follow models of chassis provision in other countries, carriers have divested themselves from chassis ownership and shifted these responsibilities to third-party leasing companies. Supply chains are the end-to-end process of producing and distributing a product or commodity from raw materials to the final customer. Supply chains can be fairly localized, global, or anywhere in between. Management of the supply chain involves shippers adapting supply chain decisions to changing market conditions and to gain efficiencies. For example, a furniture importer’s supply chain could include materials and finished goods from Southeast Asia that are then transported to a West Coast port and distributed across the United States. The freight transportation network, including ports, is a critical component of how end-to-end supply chains function. Lowering production or transportation costs can be key to achieving efficiencies in the supply chain. Industry supply chains have evolved in recent years with advances in communications and computing technology, reductions in trade barriers and production costs, and the opening of new markets globally. Over the past several decades, firms have become increasingly reliant on timely shipping. “Just-in-time” business models enable firms to save inventory costs by planning their supply chains carefully to have inputs and goods delivered within very specific time frames. While these strategies are highly efficient, any disruption in the supply chain can have a greater impact than would be the case if larger inventories were held, buffering any breakdown in planned deliveries. Further, many shippers face seasonal demand, where goods must be delivered to the customer during a narrow window of time, such as goods for the holiday season or agricultural goods. In addition to private entities and state, regional, and local governments, multiple federal agencies have roles in various aspects of port and near- port freight infrastructure and in facilitating international trade. Although historically DOT’s freight policy and funding have been targeted towards highways and transit, some DOT programs have funded port-related projects such as the Transportation Investment Generating Economic Recovery Discretionary Grant (TIGER) program; the Transportation Infrastructure Finance and Innovation Act (TIFIA) program; and Railroad Rehabilitation and Improvement Financing (RRIF). These programs’ broad eligibility has allowed states and local governments to fund multi- modal, multi-jurisdictional projects. In 2012, MAP-21 expanded DOT’s authorities to address multimodal freight, and DOT has subsequently assumed more of a leadership role in federal freight activity. MAP-21 established a national freight policy focused on highways and directed DOT to develop a national freight strategic plan. The goals of this policy include increasing the economic competitiveness of the United States, reducing freight congestion, and improving the safety, reliability, and efficiency of the freight network, among other goals. In October 2015, DOT issued a draft National Freight Strategic Plan for public comment and plans to finalize the plan by December 4, 2017, in accordance with the statutory deadline mandated by the FAST Act. In December 2015, the FAST Act expanded DOT’s freight role again. The FAST Act created a new freight formula program, authorized at $6.2 billion over 5 years, to fund improvements on the National Highway Freight Network. Up to 10 percent of the funds may be used for freight rail and intermodal projects, including projects at ports. The FAST Act also created a new discretionary grant program, commonly referred to as the FASTLANE program, to fund major transportation projects, such as highway bridge projects, as well as freight projects. Up to $500 million of the $4.5 billion authorized for the program over 5 years may be used for freight rail, intermodal, or port projects. The Act also directed DOT to designate a multimodal freight network and undertake a port performance data effort. Other federal agencies with specific roles related to ports include the Departments of Commerce, Homeland Security, and Agriculture as well as the U.S. Army Corps of Engineers (Corps) and the Federal Maritime Commission (FMC) (see table 1). For example, the Corps is tasked with maintaining navigable waterways and, consequently, is the lead federal agency for harbor dredging projects at ports. Other agencies have a specific role related to a step in the flow of goods and share information with other agencies to support their purposes. For example, Customs and Border Protection, within Homeland Security, inspects and clears cargo as part of its overall mission of protecting the homeland. After gathering required customs information, it provides data on import trade to the U.S. Census, within Commerce, which it maintains and makes available for analysis. Environmental regulation and protection of port complexes, channels, and waterways, may involve multiple federal agencies including the Corps, the Environmental Protection Agency, and DOT. Some port infrastructure is outdated and not well suited to address the recent changes of global shipping. Literature we reviewed and stakeholders we interviewed as part of our case studies described how existing capacity at each of our case study ports could not adequately accommodate larger ships, specifically, and increased volumes, generally. For example, acreage for storing containers within some terminals (i.e.