The Caffaro was a 6479-ton steamship built at the Ansaldo shipyard in Genoa Sestri for the Compagnia Italiana Transatlantica, based in Genoa. Launched and delivered in 1925, it measured 121 meters long and 16 meters wide. It had a central quarterdeck, two masts, and four holds on three decks, served by nine derricks.

It bore the name of Caffaro di Rustico from Caschifellone, known as Caffaro, sailor, crusader, consul, chronicler and considered one of the founding fathers of Genoese historical memory. As a sailor, Caffaro was captain of the fleet that defeated the Pisans in the Battle of Piombino in 1125, and the Muslims in the Battles of Minorca and Almeria and Tortosa in 1146-1147.

In 1937, with the creation of FINMARE for the reorganization of the main Italian shipping companies, the Caffaro, together with her sister ship Casaregis, passed to Lloyd Triestino, based in Trieste. 

With the outbreak of war, the ship was requisitioned by the Royal Navy on 4 July 1940, and used for supplies for operations in North Africa.

At 1:00 a.m. on September 10, 1941, she set sail from the port of Naples on her eleventh war transport mission to Libya, her third on behalf of the German government. As far as the Caffaro was concerned, this would be her last voyage.

The Caffaro and much of her crew were veterans of these perilous voyages. During previous missions, they had endured countless air raids on ports, direct attacks at sea, and had seen other steamships with which they were traveling in convoy, such as the MADDALENA ODERO, the BRAREMA, and the BEATRICE C., sunk. They had also witnessed the tremendous explosions that had literally destroyed the steamships MONTELL0 and PREUSSEN. No one on board had any illusions about the dangers this voyage would present, and everyone was focused on maintaining maximum efficiency of every ship's system and paying the utmost attention to carrying out their duties.

In Naples they had embarked a cargo consisting of munitions, supplies and vehicles totalling approximately 2500 tons, as well as 170 German soldiers, who were added to the 10 Italian Navy and 7 Italian Army soldiers, and the 44 civilian crewmen. 

The convoy with which he was preparing to sail towards Tripoli was composed of the steamships TEMBIEN, NIRVO, BAINSIZZA, NICOLO' ODERO and the motor vessel GIULIA, escorted by the destroyers ORIANI and FULMINE and the torpedo boats PROCIONE, ORSA and PEGASO.

Navigation proceeded smoothly throughout the 10th and 11th, during which time the air escort remained constantly visible above the convoy. Some Italian torpedo bombers took advantage of the convoy to conduct exercises simulating an attack. Then it was the turn of all the onboard machine guns to be tested to ensure their perfect efficiency. 

North of Pantelleria, the torpedo boat CIRCE joined the convoy, positioning itself astern and reinforcing its escort.

Around midnight on the 11th, while the convoy was sailing in double column towards the Kuriat Lighthouse, the noise of enemy aircraft engines could be heard flying over the group of ships, apparently without sighting them.

At 3:20 a.m., the convoy was attacked by a formation of three Swordfish torpedo bombers from Malta's 830th Squadron. They attacked at an altitude of 500 meters, with their lights on, in a triple formation, two in front and one lower aft. The anti-aircraft guns opened fire, the Swordfish turned off their lights, and one charged the Caffaro, launching a torpedo from approximately 800 meters away. The steamer managed to avoid it by turning, and the torpedo, having reached its end of its range, exploded between the stern of the steamer TEMBIEN and the bow of the torpedo boat CIRCE. Aboard the Caffaro, they were certain they had shot down the attacker, while the torpedo bombers returning to Malta reported that they had certainly hit a steamer. Both impressions were incorrect, and the convoy continued on its way. On the morning of September 12th, the ships observed the disturbing presence of an enemy reconnaissance aircraft at very high altitude.

At 2:05 PM, the convoy was under attack again. Eight Blenheim bombers from Malta's 105th Squadron, led by Squadron Leader Smithers, arrived from the starboard side in a disorderly formation, flying low at an altitude of about 30 meters above the water. The ships' anti-aircraft fire was immediate and furious. They bombarded the formation with a storm of fire. Two planes abandoned the attack and reversed course. The others scattered in disarray, dumping their bombs into the sea. Three planes aimed at the Caffaro, one at the bow and two at the stern, strafing. The forward plane narrowly missed its target, its bombs falling into the water, very close to the hull, while the two attacking at the stern managed to hit hold number 3, which contained ammunition and vehicles, with three bombs—two explosives and one incendiary. A fourth bomb hit the steering gear, rendering it unusable. Three planes were shot down during the attack, two of them almost certainly by the Caffaro's anti-aircraft guns, and were seen to crash: one about 700 meters to the left bow and the other about 300 meters to the left stern of the steamer.

These were aircraft Z7357, Z7423, and Z7504, which were missing upon their return to Luqa Airport, Malta. Squadron Leader (Major) Bryan Smithers' Blenheim was also severely damaged but managed to return to base.

The Caffaro turned to port and stopped. A fire immediately broke out on board. The vehicles on deck caught fire due to gasoline in the tanks of the engines and in reserve drums, as well as the ammunition loaded on the vehicles.

The ammunition loaded in the hold began to explode, and it quickly became clear that there was no way to put out the fire. The civilian commander of the CLC, Arrigo Liberi, gave the order to abandon ship. The boats were lowered while the explosions continued. The torpedo boats CIRCE, ORSA, and the destroyer FULMINE approached the Caffaro to provide assistance, while the rest of the convoy continued on its course.

231 shipwrecked survivors boarded the escort vessels. Commander Liberi was the last to abandon ship, swimming, after having ordered and perfectly organized the abandonment.

At 15:43 PM, the Caffaro's aft hold exploded with unprecedented force, projecting debris over a thousand meters. The steamship's keel broke and sank at 16:10 PM, leaving burning diesel fuel on the surface, releasing thick black smoke.

Upon reaching Tripoli, those aboard the Caffaro were missing a sailor and a German soldier, while Second Lieutenant Kaup, the German military commander of the expedition, seriously wounded by machine gun fire during the attack, died after being admitted to a hospital in Tripoli.  

After the loss of the Caffaro, the convoy suffered a new attack by bombers during the night of 13 September which caused the loss of the steamer NICOLO' ODERO.