Question:
Are ground units on ships in supply?

Answer:
The regular supply rules govern the supply of ground units, even when they are embarked on board ships. Note that in some cases units will become unsupplied when on board ships. For example, a unit embarks upon a NT and ends its turn at sea. In the next player turn, the unit becomes out of supply, since there is no way it can trace a supply line to a supply source. If the NT is in port, however, then an embarked unit on board may be able to trace supply, per Rule 12.

If this seems a bit odd, it works this way to prevent game abuses, such as embarking units on ships to establish a permanently-in-supply “floating reserve” or other silly things.

Source:
TEM 38/39