But SS Cato became known as the Guinness Wreck, according to historian Rob Bowen, because much of its cargo - 740 barrels of beer - washed up on the shore.
The vessel struck a mine off Nash Point to become the first Bristol Channel merchant shipping casualty of the war.
A service takes place on Saturday along with a parade carrying beer barrels.
Ross Martin from Porthcawl RNLI said: "We weren't sure how to commemorate it really.
"It was a tragedy, but the reason why Cato is remembered and thousands of other sinkings aren't is because of the Guinness, and we felt as though our commemorations should acknowledge that."
He said the event led to a "Drunken Dad's Army few days", as people raced to salvage the kegs along the coast.
SS Cato was built on Clydeside in 1914, and survived her World War One service as an ammunition-carrier.
After the Great War she ferried freight across the Irish Sea for the Bristol Steam Navigation Company, and had carried out thousands of crossings by the time of that fateful one in the early hours of 3 March 1940.
U-boat U29 had been tasked with attacking the British battleships HMS Hood and HMS Warspite off the coast of Scotland, but when she failed to find them she headed south for the Bristol Channel, where she laid two minefields off Nash Point.
Cato's distress call was received by a trawler two miles away, but it had sunk by the time help arrived.
Mr Martin said: "It's a strange story, as it has two utterly contrasting sides to it; the tragedy felt by the families of the sailors in Bristol, and the pleasure of the people around Porthcawl at their unexpected windfall, at a time when beer of any kind was in very short supply."
In his blog, local historian Rob Bowen outlines some of the local legends surrounding the beer barrels and how, despite the best efforts of Customs officials, some were hidden among the dunes by locals who revisited them from time to time armed with jugs and glasses.
The commemorations start at 11:15 BST from the Porthcawl Lifeboat Station.
There will be a service and the dedication of a plaque, with beer barrels being "smuggled" to a local pub.
Porthcawl's Lifeboat Station is marking a bittersweet World War Two tale when a cargo ship sank with 13 lives lost.