Yes ships are more scarce.... did you try activating the 16km mod through JGMSE? (startard viewig distance is 8km).
Also you will find more success (in early war) sticking near English coast and doing "listening" dives using the hydrophone yourself.
Also if you sailed at 1024 TC, then your chances of your watch crew spotting a ship go down significantly. Try cruising at no more than 512 in areas where there is known ship traffic.
SH3 stock was TOTALLY unrealistic with the amount of traffic and reports that would pop up on your map.
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