Operation Compass. British air, land and sea forces prepare for the assault on Bardia. Overnight (Jan 1-2), artillery moves into position in a depression 450 m from the Western edge of the Italian defenses. During the day, monitor HMS Terror and gunboats HMS Ladybird & HMS Aphis, screened by destroyer HMS Dainty and HMAS Voyager, bombard Bardia. The flotilla is unsuccessfully attacked by Italian aircraft. Overnight (Jan 2-3), RAF Wellingtons of 70 Squadron and Bristol Bombays of 216 Squadron bomb Italian positions as the Australian 6th Division moves forward to their starting points.
At 10.07 PM 250 miles West of Port-Étienne, Mauritania (part of French West Africa), U-65 sinks British SS Nalgora carrying equipment to General Wavell’s Middle East Command. 102 crew and 3 passengers take to the lifeboats. 19 crew in 1 lifeboat make land on Cape Verde Islands. 86 survivors are picked up by British freighters Nolisement and Umgeni after 8 days adrift. This completes a successful patrol for U-65, sinking 8 ships (47,800 tons) in 49 days off the coast of West Africa and becoming the first U-boat to cross the Equator.
300 miles Northwest of Ireland, U-38 is depth charged by a convoy escort. U-38 is slightly damaged but able to continue with the patrol.