Each region has a hard-cap limit of 32,000 Supply Units worth of ships that it can support. See Supply Units
If a player has more ships at a location than allowed by support units, excess ships will automatically be scrapped. Scrapped ships return no value.
Ships cannot move to a region that has already reached the SU limit, otherwise they would be scrapped on arrival. The only way around this is to issue move orders at the same time for ships to move out of the region and into the region.
For example, assuming region A is full; move 1,600P worth of ships from region A to region B, and move 1,600P worth of ships from region C to arrive at region A.
A region that has reached the 32,000 SU limit can not produce any more ships. Ships must move to another region to make space for new ones to be built.
A player may chose to scrap ships in order to make space at a region to build new ones. Scrapping returns no value. See Scrapping Ships
If a player is building a large ship, (larger than the 3,200 SU’s the region produces per turn), there must be enough SU space in the region once it has completed, otherwise some ships will need to be scrapped. See Building Large Ships
If a player wins a battle for a region and has more ships than the region can support, the excess ships must immediately move to a safe region to resupply.
If they have no safe (non-combat) region to go to, they are automatically scrapped and removed from play. See Timing of Execution