RulerOfDaPeople has answered this pretty well. Just to touch up a few details: In vanilla, which is what I play, the first transport that can carry settlers, workers, and military is also the galley, which can carry 2. The catch is that the galley can only operate in costal waters. So, it works fine to transport along the coast or across a very narrow strait to another land mass. It won't get you to any land mass that is across ocean waters. The next ship that can transport your settlement team is the galleon, which can carry 3. It can go anywhere on the ocean and is what you need to get to a land mass that is not just one or two spaces away.