Japanese construction battalions had transformed the prewar airfield and harbor at Lae into a major air base and anchorage on the Huon Gulf. Lae thus anchored the Japanese Army's offensives  in eastern New Guinea, and to Wewak.

On 19 February 1943, U.S. Navy cryptanalysts handed MacArthur solid intelligence that the Japanese were planning another major transport to Lae in early March. Every available aircraft was thrown into a three-day struggle from 2 to 5 March, known as the Battle of the Bismarck Sea. Eight transports and four destroyers were lost in all. Of the 51st Division's 6,912 troops, about 3,900 survived, but only 1,000 soaked, oil-stained, and dispirited officers and men reached Lae.

The destruction of the 51st Division condemned the Japanese to the strategic defensive on New Guinea.