At 09.52 hours on 13 Sep 1942, U-408 fired a spread of three torpedoes at convoy PQ-18 about 100 miles southwest of Spitsbergen and observed a hit after 5 minutes 27 seconds on the Stalingrad, accompanied by a column of fire and a boiler explosion. The other two torpedoes missed, but one of them hit the Oliver Ellsworth which had to steer hard left to avoid the torpedoed ship.

The Oliver Ellsworth (Master Otto Ernest Buford) was struck on the starboard side between the #4 and #5 holds. The engines were secured immediately and the crew of eight officers, 34 crewmen and 28 armed guards (the ship was armed with one 4in, one 3in, eight 20mm and two .30cal guns) abandoned ship in four lifeboats within 15 minutes after the hit because they feared an explosion of their cargo. But the vessel still had headway, causing both starboard boats to swamp and one of the port boats struck a raft and sank. Due to the quick reaction of the British rescue ship Copeland (Master William Joseph Hartley, DSC) and HMS St. Kenan (FY 264) (T/Lt R.R. Simpson, RNR), all men could be picked up within one hour and were later landed at Archangel, except one armed guard who drowned. After the rescue action, the A/S trawler fired some shells into the still floating wreck of the Oliver Ellsworth which sank stern first at 10.30 hours.