At 06.32 hours on 10 March 1942 the unescorted and unarmed Gulftrade (Master Torger Olsen) was torpedoed by U-588 3 miles off Barnegat Light. The tanker was spotted by the U-boat, because the running lights and the masthead light had been turned on to avoid collision with several colliers in the vicinity. A torpedo struck the starboard side just forward of the mainmast and just aft of the bridge. The explosion broke the ship in two, ripped up the decks and completely opened tanks #5, #6 and #7. Oil and debris was sprayed over the vessel from stem to stern and the ship caught fire immediately. Within one minute, the high seas washed over the tanker and extinguished the flames. The engines were stopped and the ship was abandoned by the crew of eight officers and 26 crewmen. The high seas and the fact that oil lay several inches deep all about the deck and had filled the boats complicated the abandoning. Seven survivors stayed on the stern and nine abandoned ship in a lifeboat. Two other boats with 18 men swamped, drowning the officer and 17 crewmen in them.

USCGC Antietam (WPC 128) arrived and picked up the men in the lifeboat. While maneuvering to remove the men on the stern, her port propeller got fouled with a mooring line. The men were then rescued by USS Larch (AN 21). The survivors reported that the U-boat surfaced 5 minutes after the attack, circled the stern and departed 45 minutes later on a southerly course.

On 21 Oct 1943 the master Torger Olsen died when his next ship, the Gulfland, collided with the Gulfbelle.