In the 1921 case of Great Northern Railway Company et al. v. Merchants Elevator Company, the U.S Supreme Court ruled in favor of Merchants Elevator Company. The dispute revolved around whether or not a railway company could charge for storage on cars that were detained beyond a certain period due to lack of shipping instructions from the consignee (the receiver). The court held that such charges were unlawful under Section 15 of Interstate Commerce Act which prohibits carriers from charging more than just and reasonable rates for services rendered. This decision was based on an interpretation that demurrage charges (penalties for exceeding allotted time) should be seen as penalties designed to promote car efficiency rather than as compensation for use of cars as warehouses, thus they cannot exceed what is necessary to achieve this purpose.

In the dissenting opinion for Great Northern Railway Company et al. v. Merchants Elevator Company, Justice Holmes argued that the majority's decision to allow a shipper to recover damages from a carrier due to delay in transportation was incorrect and not supported by precedent or law. He contended that there is no legal obligation for carriers to provide prompt delivery unless explicitly stated in their contract with shippers, which was not the case here. Furthermore, he pointed out that delays are often unavoidable due to various factors such as weather conditions and mechanical issues; therefore it would be unreasonable and unfair to hold carriers liable for them without clear contractual obligations specifying otherwise.