With the fall of France in June 1940, Germany was able to shift its U-boat operations to the French Atlantic coast ports of Brest, Lorient, St. Nazaire, Bordeaux, and La Rochelle. From them, U-boats had direct access to convoys in the North Atlantic. With the bulk of the French fleet out of the war, the United Kingdom had to shift many of its warships from convoy support duties to defend the British coast. This shift in strategy allowed the Germans to exploit the lightly defended convoys sailing east.
From July through October 1940, German U-boats sank 282 Allied ships totaling nearly 1.5 million tons. For the German submariners, the period became known as the “Happy Time” (Die Glückliche Zeit). Adm. Karl Dönitz was nevertheless not satisfied with the success rate. German shipyards were producing an average of four vessels a month in 1940, but because of the length of training for crews, most of these U-boats would not see service until 1941. To fill the numbers gap, Dönitz requested that Italian submarines be used to support operations. In August 1940, 27 Italian submarines were sent to French ports (their number would eventually increase to 32). They were not as effective as the German boats. From September 1940 to July 1943, Italian submarines sank a total of 105 ships in the Atlantic, while suffering a loss of 16.
By 1941 the tide began to turn for the U-boats in the Atlantic. With the Destroyers for Bases agreement between the UK and the United States, the Royal Navy was given 50 old destroyers from the US Navy in exchange for bases in Newfoundland, the Caribbean, and British Guiana. These destroyers would help supplement convoy security although they were still not enough to effectively stop U-boat attacks. One of the greatest achievements against U-boat operations occurred on 9 May 1941 when crew members from the HMS Bulldog were able to capture an Enigma machine and its code book from U-110.
In the summer and fall of 1941, the British were able to intercept Enigma messages and pinpoint where the U-boats were positioned in the Atlantic. This allowed Allied convoys to avoid U-boat patrols, and by July 1941 merchant losses had dropped significantly. Following the United States entry into World War II, Dönitz shifted his attention toward the American eastern seaboard. In January 1942 he launched Operation Paukenschlag (Drumbeat). Exploiting America’s lack of a convoy system off the eastern seaboard, the following months became known as the Second Happy Time.
From January to August 1942, the Germans sank over 600 ships totaling 3.1 million tons. Because of the long distance from their bases in France, the Germans began the use of supply U-boats known as Milk Cows. They would supply U-boats with food, fuel, and additional torpedoes, allowing for longer operations. By April the US began the implementation of a convoy system. Noticing a shift in American strategy and an increase in anti-submarine operations Dönitz ended the campaign in the summer of 1942.