She was supposed to cross the ocean in convoy HX-178, but rough seas slowed her down and the convoy was lost. The rolling also caused her deck cargo to shift, so the freighter Collamer turned around and headed back towards Halifax. As she limped back to port in the early morning of March 5, 1942 a torpedo slammed into her starboard side. The well placed torpedo wrecked the engine room, ripped open the boilers and killed seven men.

A distress signal was sent and the master, John Hultman, ordered the ship abandoned and two lifeboats were lowered. Less than five minutes after the first torpedo struck and while the lifeboats were alongside the ship, a second torpedo ripped through the hull on the port side and exploded. She was already down by the stern, and this death blow sent the ship down in seconds. The thirty-one survivors got away in time and were not approached by the U-404, which had been the aggressor. This was the first ship sunk by Kapitänleutnant Otto von Bülow and the first sunk by U-404.

A radio listening post in Halifax heard the SOS sent by the Collamer and dispatched two aircraft to search for survivors. Within a few hours the aircraft located the two boats and signaled the position of the lifeboats to the British steamer Empire Woodcock which picked them up.