In October, on her second eastbound voyage, the ship put in at the Azores with three of her cargo holds ablaze; her New York agent attributed the fires to sabotage.

On 29 August 1917, Milazzo was sunk by the Austro-Hungarian Navy submarine U-14 under the command of Georg Ritter von Trapp, later more notable as the patriarch of the family featured in The Sound of Music.

[3] The ship's engine was originally installed on board passenger liner "Principessa Jolanda" which had capsized at launch in 1907 and had to be scrapped.

The rail cars were then positioned in the elevators, raised to the top, and had their loads dumped into chutes that then discharged the coal from the ship.

[4] After losing a blade from her propeller in calm seas on 25 June—attributed by Milazzo's master to vibrations of the empty ship—she arrived at New York on 1 July.

At Gravesend Bay, Milazzo stopped and took on 100 long tons (102 t) of high explosives to supplement her 10,000-long-ton (10,200 t) cargo of steel, silk, and sugar.

The newspaper printed speculation from William Hartfield, the agent for the ship, that incendiary bombs hidden in the bags of sugar were the cause of the fire.