Lego is building out its global supply chain brick by brick. The Danish toy maker is placing a $1 billion, 1.7-million-square-foot factory in Virginia in a push to get its plastic building blocks closer to consumers. The WSJ’s Saabira Chaudhuri and Allison Prang report that Lego is resuming production in the U.S. after shutting a Connecticut plant in a cost-cutting drive in 2006. Supply-chain imperatives have overtaken the downsizing efforts, and Lego is looking to shorten lead times to major markets around the world by placing production closer to customers. The plant outside Richmond will replace U.S. distribution now served out of Monterrey, Mexico. Lego is expanding that facility but says it may also use the Richmond factory for markets including Mexico and South America. Lego is also opening a factory in Vietnam to serve parts of Asia for a total seven factories worldwide.

Rising interest rates could bring some pain across supply chains before they bring relief. Executives say the Federal Reserve’s more aggressive stance will likely raise inventory costs, pinch freight carriers and pause some warehouse projects. The WSJ Logistics Report’s Liz Young writes the move may also benefit businesses if it helps tame the high inflation that has driven up costs for everything from components to transportation. Daniel Son, who oversees supply-chain finance at U.S. Bank, said inventory-carrying costs will likely rise and companies may look to trim orders and stockpiles if they can’t pass the higher costs along to their customers. Capital projects like distribution centers will get a second look as higher borrowing costs change the calculations on investor returns. But Ken Simonson of the Associated General Contractors of America says highway projects shouldn’t take a direct hit since they are funded with government dollars.

• The Federal Reserve approved the largest interest rate increase since 1994 and signaled it would continue lifting rates at the most rapid pace in decades. (WSJ) 
• Retail sales in the U.S. fell 0.3% in May. (WSJ)

Signs of concern in the venture-capital world don’t seem to be slowing the investor rush into logistics technology. Florida-based startup PayCargo just raised $130 million in a Series C funding round, the WSJ’s Marc Vartabedian reports, as the company looks to expand its payments and data insights platform for logistics operators in Asia, the Middle East and Latin America. The deal is the latest signal that investors are bullish on technology companies aiming to digitize new markets. In recent years, investors have pumped capital into startups that are targeting supply-chain efficiency, including the behind-the-scenes technology underpinning logistics operations that once drew little attention. PayCargo’s latest backing comes from an arm of investment firm Blackstone, which has been building a stable of logistics businesses, including warehouse operators. That investment includes a stake last fall in Carrix, the parent company of container terminal operator SSA Marine.

• Philadelphia-based supply-chain integration platform Chain.io raised $11 million in a Series A funding round. (Journal of Commerce)
• Employees of Goldman Sachs-backed supply-chain startup Slync.io say they haven’t been paid in more than a month. (Insider)

China’s industrial production increased 0.7% in May amid signs the Covid-triggered pressure on the country’s economy is easing. (WSJ)

The International Energy Agency forecasts that global oil demand will outpace supply in the next year. (WSJ)

President Biden urged U.S. oil refiners to expand capacity and criticized the companies for profiting as the public pays record prices. (WSJ)

Natural-gas prices in Europe jumped another 24% as Russia said it would further cut its exports to Germany. (WSJ)

Contract manufacturer Foxconn is building its first plant in Taiwan to produce electric-car batteries. (WSJ)

U.S. authorities have linked hundreds of car crashes to self-driving features and other new technology in automobiles. (WSJ)

Automaker Stellantis plans to start laying off workers at its Sterling Heights, Mich., stamping plant. (Reuters)

Major suppliers to Toyota and Nissan plan to furlough workers as the semiconductor shortage and logistics logjams strain auto production. (Nikkei Asia)

Hershey opened an 800,000-square-foot distribution center in Annville, Pa. (WGAL)

British rail operators are preparing to cancel thousands of trains during strike action next week that is expected to cripple service. (Financial Times)

Container shipping lines are more aggressively seeking volume commitments under new contracts in exchange for guaranteed slots. (Lloyd’s List)

A midshipman who says she was raped aboard a Maersk vessel says she is suing the company because she wants to see the shipping industry change. (TradeWinds)

Trans-Atlantic air cargo capacity has rebounded to pre-pandemic levels on the growth of new passenger flights. (Air Cargo World)

Danish freight forwarder DSV wants to acquire the international logistics operations of C.H. Robinson Worldwide. (Reuters)

Federal trucking regulators are updating their definitions of freight brokers based on new technology reaching across the sector. (Transport Dive)

Truckload carrier P.A.M. Transportation bought family-owned Metropolitan Trucking for $79.8 million, including debt. (TB&P)

Paul Page is editor of WSJ Logistics Report. Write to him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @bylizyoung and @pdberger. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.