Currently ship designs are stored in the Design folder in the GalCiv3 directory - outside of the Mod folder.

I have not been able to get my race mod to utilize the custom ship designs as default (as opposed to the ships from that ship style).  The relevant xml files are FactionShipStyleSetDefs.xml and ShipClassDefs.xml.

In FactionShipStyleSetDefs.xml, for 

<DisplaySampleObjGfxConfig>Terran_Survey_04S.objgfxconfig</DisplaySampleObjGfxConfig>

If you change the file to something in your Designs folder, it does not show in game when you create a race and select a ship style.  

Or, in ShipClassDefs.xml, the file structure for each entry is:

<ShipClass>
<InternalName>TestColony</InternalName>
<DisplayName>TestColony_Class_Name</DisplayName>
<Description>TestColony_Dec</Description>
<ThumbnailOverride>Test Colony Ship_B6036AF0C7F348018663D48B4D0B602E.PNG</ThumbnailOverride>
<ShipHullType>Cargo</ShipHullType>
<ShipRule>ColonyShip</ShipRule>
<ShipDesign>Test Colony Ship_B6036AF0C7F348018663D48B4D0B602E</ShipDesign>
<AIShipClass>Colony</AIShipClass>
<StrategicIcon>ColonyShip</StrategicIcon>
<BlueprintDef>ColonyBlueprint</BlueprintDef>
</ShipClass>

However, if you change the thumbnail, or ship design (to refer to the file name of your custom designed ship) it does not work.  (changes done in a mod file, not in main file.).  In fact, the game just crashes, presumably because it cannot find the files that it needs. 

The files "Test Colony Ship_B6036AF0C7F348018663D48B4D0B602E.PNG" and "Test Colony Ship_B6036AF0C7F348018663D48B4D0B602E.objgfxconfig" and "Test Colony Ship_B6036AF0C7F348018663D48B4D0B602E.ship" are in the design folder.

If I copy the files and place them in the program file's Designs folder, then they appear properly.

In other words, the mod does not read the ship design files from the Designs folder in the My Games->GalCiv3 folder.

For modders, this will be problematic.  Or, does someone know a solution?