On 25 May 1942 the unescorted Polyphemus (Master Cornelis Koningstein) picked up 14 survivors from a lifeboat of Norland, which had been sunk by U-108 (Scholtz) five days earlier and was sighted the next day by U-578 about 325 miles north of Bermuda. The U-boat dived after stalking the fast and zigzagging ship for five hours and fired a spread of two G7e torpedoes from a close distance shortly after she reappeared out of a squall of rain about 360 miles north of Bermuda at 00.18 hours on 27 May. The Germans had some difficulties to remain on periscope depth, so Rehwinkel did not see how both torpedoes hit the ship on the port side aft and fired a third G7e torpedo after regaining control three minutes later, but its engine did not run after being launched. The explosions completely wrecked the stern of Polyphemus and killed 15 Chinese crew members in their quarters. The surviving crew members, two passengers and the shipwrecked men abandoned ship in five lifeboats within 7 minutes after sending distress signals as she was settling by the stern on an even keel until sinking at 01.01 hours. In the meantime, the U-boat surfaced and questioned the chief officer who gave information about the name of the vessel and her cargo, but not the port of destination. A carton of cigarettes and the course to New York were given to the survivors before U-578 left. Rehwinkel obviously did not like the Dutch master because he wrote in the KTB: ein typisch vollgefressener Holländer.

The lifeboats tried to remain in contact with each other but the boat in charge of the chief officer with ten men from Polyphemus and four men from Norland became separated from the others after the second night. Early in the morning of 29 May, U-593 (Kelbling) appeared and the Germans asked from which ship they were, where and when they had been sunk and wished them a good trip before leaving. Shortly thereafter they were picked up by the Portuguese steam merchant Maria Amelia (Master de Mirande) in 38°16N/64°19W which encountered the same U-boat less than five hours later. The U-boat had chased the ship for three hours until spotting her neutrality markings, then surfaced nearby and left without investigating the ship which had stopped the engines, expecting a contraband control. The survivors were eventually landed in New York on 1 June. Eight men from Polyphemus and two men from Norland in the motor lifeboat in charge of the master were picked up by the American fishing boat Huntington Sanford (Skipper Joshua W. Murphy, Jr.) about 50 miles east by north of Nantucket Lightship early in the morning of 1 June and landed in New Bedford the next day.

Eleven men from Polyphemus and two men from Norland in the boat in charge of the chief engineer officer were picked up by the Torvanger about 130 miles east of Nantucket in the evening on 2 June and shortly thereafter transferred to the American fishing boat Elva and Estelle about 60 miles southeast of Pollock Rip, which landed them at New Bedford on 3 June. 15 men from Polyphemus and three men from Norland in the boat in charge of the second officer were picked up by the Portuguese steam merchant Mirandella in 39°32N/65°00W in the morning of 3 June and landed in New York on 5 June. The lifeboat in charge of the third officer with seven men from Polyphemus and three men from Norland first encountered U-566 (Borchert) in 38°00N/63°55W at 20.00 hours on 29 May and they told the Germans that nothing was needed when asked if they needed anything. The U-boat left after providing the survivors with water and the course to the nearest land. At 13.30 hours on 30 May, U-593 spotted the same lifeboat in 38°00N/64°50W and gave them bread and a bottle of rum. The survivors were eventually picked up by USCGC General Greene (WPC 140) in 41°14N/69°20W in the afternoon of 5 June and later that day landed at Nantucket, Massachusetts.