You're using Auto FCS...you get a sight range and EXP nerf. Since you're targeting an area beyond where the Auto FCS can hit, it ignores your targeted point.

edit: rehor's right. FCS doesn't affect shell range.

My bad, you're right. I should have said sight range, fixed.

When you use auto its best to aim abit past the target to hit it. the gunset you are using would determine how far past you click. Play around with that to get a feel for it and you will pick it up. Anyway I would recommend giving manual a shot now since its more efficient anyway.

Ok,, I understand what you guys are saying, But I literally mean that the rounds are landing 1-2 inches from my ship. On a 47 inch big screen monitor.

A dead monkey could shoot farther then that. Are you sure that's all there is?

If you click past the gun's range the turrets will just fire at 0 angle, if you need to know how far you can shoot before that happens get in a test room and well..test

Seriously, the best solution is to use manual FCS.

Aiming. Might take some practice but it's forever worth it.

For auto, keep in mind that your angle is changes on the lower left panel. Perhaps the "click" did not
register and you are still firing at whatever the angle was before.
Another reason is this. You gun may have been aimed very close to your ship.
You then aimed/clicked beyond the range capable of your gun. Then the angle will NOT switch to max. It
will remain at the last angle possible which is still close to your ship.
So you need to look at the bottom left panel to ensure your angles have changed to capable firing distance.
Also you said 3 inch guns. Those can't shoot far.