By the fall of 1940, a steady stream of convoys was leaving Halifax and Sydney, Nova Scotia, laden with matériel destined for British war factories. The Royal Canadian Navy (RCN) provided escorts for the convoys in the western Atlantic, but a shortage of destroyers and corvettes meant that each convoy had only two RCN escorts.
The commander of the German U-boat (submarine) fleet, Admiral Karl Dönitz, employed new "wolf- pack" tactics. German U-boats were deployed over a wide area. Once a convoy had been sighted, the submarines would converge on the merchant ships and mount a coordinated night attack. The wolf-pack attacks were highly effective.
The experience of Convoy SC-7, a group of ships sailing from Halifax, provides a striking example of the enormous damage that a single wolf-pack attack could inflict. Only 7 German U-boats were involved in the raid, but the convoy lost 20 of its 34 vessels. Throughout the last four months of 1940, Allied shipping losses in the Atlantic continued to rise. The RCN and Royal Navy did not have enough ships to provide adequate escort protection.