A couple of oddities that may be as intended

[SMK-at-work]

I thought it was a bit more than that - about 19.25 million tons (http://tinyurl.com/133x - a pdf that takes a few minutes to load), and I thought you might be allowing for shiping not used in the North Atlantic/North Sea - shipping was spread around the world, and the units in the game cannot represent the total amount.  As I posted in anothe thread - when Brazil entered the war in 1917 they seized 40 or so German ships in their ports - even German shipping was still working between neutrals.
 
Your point about convoys is a good one.....perhaps the TE should ahve a convoy option in the same manner the CP have an unrestricted sub option?  It would increase the chances of DD's hitting subs (since it will bring subs into closer proximity), and would result in only 4/5ths of actual supplies getting through?
 
Some other economic/trade points.....
 
Does anyone think the TE gets food far too easily from trade?  It seems fairly simple when playing the TE for the brits to accumulate 50-60-70 surplus food in a few turns.......and even tho they use 9 a turn that gives them a massive buffer?
 
And how about that powerhouse of CP industry - Turkish raw materials.........it seems strange that Turkey (and AH to a lesser extent) can power German industry so readily to massive production.  I've been looking hte web for info on Turkish exports prior to WW1 & haven't been able to find much on what they were.......does anyone have any info on the subject?

[SMK-at-work]

I found a table of how merchant shipping was employed at the end of 1918 at http://www.gwpda.org/naval/stats005.htm - interestingly for the UK about 1/2 of it is in "import service" for the UK and various allies, about an 1/8th in other mercantile service (mainly coastal & colonial), fully 1/4 is on non-merchant service - mainly military & naval services, about 1/6th is under repair, and another 16th is "tankers" - which are not specifically noted otherwise.

It's interesting to note that about 1/3rd - 1/2 of the import service to France and Italy is provided by UK shipping - they only provide about 1/4 of it themselves.

Convoy loss information is given at http://www.gwpda.org/naval/stats006.htm - it's interesting to note that convoys were introduced to various routes at different times.

I'd suggest a total change to ASW.......ditch it.

Instead let the UK deploy a small number of air points to u-boat patrols (say 1 or 2), and allow them to increase the chances of the smae number of destroyers to locate and attack U-boats.

Have a 2 or even 3-stage convoy system.......the allies can choose how much they want to convoy - a little, a moderate amount, a lot - and either increase the chance of a proportion of DD's to intercept U-boats, or reduce the chances of a proportion of U-boats to intercept transports or maybe a bit of both. Each level of convoy would also lower the efficiency of allied shipping of course.

[Shawkhan]

...I had never researched the differences between WWI and WWII submarine warfare before so am myself rather astounded at how incredibly effective U-boats were in WWI as compared to their WWII counterparts. It appears that the Germans sank over 5000 ships for some 11,000,000 tons of British shipping during the war. After the convoy system was adopted on May 10, 1917, only 250 more British ships were sunk by the end of the war.
...As far as airpower in WWI was concerned, exactly one U-boat was sunk in the entire war from the air. Quite a contrast with WWII!
...For what it is worth, different sources I have recently checked give different tonnages for the British mercantile fleet. The variation seems to be from 12,000,000 tons to 20,000,000 tons, so I can understand why SMK looked askance at my first figure for tonnage.
...I concur with SMK  in his comments about ASW in WWI. It basically was almost nonexistent. The Germans probably lost more U-boats to accident then they did to active ASW measures during the war. The convoy system worked because the escort vessels including air cover, made the U-boats submerge before they could come into effective attack range.
...It is interesting to note that in 1917, just before convoys were put into effect, the British were down to just 6 weeks of supplies(less than one gameturn). Talk about your close-run affair!
...Given that Frank gives the British 18 transports at the start, it appears that he assumes that the British probably had 18,000,000 tons of shipping capacity. If that number of transports should drop below 6, then starvation would be imminent. Then I would trigger a convoy rule as SMK has suggested.
...Now if we could only come up with a purpose for the other DD units in the game. As the German player I have yet to sail even one DD unit as they don't appear to be worth the naval points to do so. Cruisers are barely better I might add.

[SteveD64]

yeah CP DD's are worthless it seems as are UBoats on patrol.  CA's and DD's should act as a screen- I don't know how naval combat works (still) but as an idea, say if there are three rounds then the screening vessels should take the punishment in the first round (by other light ships) and then the heavier ships in the later rounds exchange blows which would encourage sortieing with lighter vessels.  If you don't sortie with light ships then your heavy ships should be subject to more fire.  Just an idea.

[SMK-at-work]

I often put the UK sub on anti-shipping in hte Baltic - IIRC it's never hit anything yet, but I'll sometimes put the 2 Rostock based german DD's onto ASW there jsut to be "fair".
 
they also go on patrol on T1 with the PD based there as a couple of DN's rebase, jsut to avoid giving Russia control and therefore access to trade with the Brits.

[SteveD64]

In my previous game a Brit Sub hit a German transport in the NA.  My opponent was beside himself ("first time I've ever seen that!" he wrote me). 

[SteveD64]

Perhaps, as another idea, that DD's should act like air points- they increase the chance that your heavier ships hit your opponent.  They function as historically- the eyes and ears of your navy?