) and annual payments (a) is a follows:

Modern management techniques are slowly but surely being introduced aslo in shipping management. Large sections of the industry practises strategic management at various levels in the firm. This paper outlines a method for deciding chartering strategies in the international bulk shipping industry. A well known risk/return model is tailored to transportation contracts in the shipping industry. The model delineates a set of optimally defined transportation contracts that may serve as a basis for the shipowner's strategic decisions. The strategies and elements of strategies suggested by the model have historically been practised by a number of successful shipowners. An important conclusion of the paper is that no second best problems exists and hence movement towarts the optimal solution is advocated even if such a solution cannot or will not be reached. Additionally, the paper provides an organized way of crafting, analysing and applying chartering strategies where the outcomes can be clearly defined and analysed based on well known statistical concepts and theories.