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I've got two linked questions - what's your preferred way to set up trade routes and what do your convoys look like?

Ideally, I'm based out of three towns that can supply everything I need. There will be one convoy that runs between these towns. Goods are almost always dropped off in the storehouse, which sells off the excess (calculated as the time of the route, plus several days extra to allow for weather, etc.). This works fine on short runs (Margarita - Puerto Santo - Port of Spain), but less well on others (Belize - Roatan - Cancun), as I run into problems with storage space (produced goods build up and the raw material stockpile for industires has to be larger owing to longer travel times).

For the longer runs, I've tried one convoy per town, but that causes headaches with figuring out how much to leave in the central storehouse and requires extra Captains out of a limited number.

I'll usually have a buy-sell (that is, it's not dealing with goods I produce) route that sweeps towns just outside my main area and dips into it at points to help ease/prevent shortages. There may be a couple of other routes that don't go through my territory; these are just for background cash, at least when the hold doesn't end up full of fish no one wants ....

Most of my convoys have been unarmed (usually fluyts and trading fluyts, sometimes carracks late in the game on some routes) and with only minimal crew. When set to automatic battles they just run from pirates; so far I haven't lost a ship this way. This saves me having damaged prize ships slowing down supply convoys and requiring a trip to a governor town to sell 'em off and it leaves more free cargo space.

Not surprisingly, my "war fleet" consists of barques until I can acquire carracks, galleons, etc. I prefer to keep it around 5-6 ships, which leaves me room to capture pirate ships for fun and profit. I generally have a workhorse convoy of 2-3 cargo vessels as well, for setting up in new towns, picking up surpluses that have built up and other special hauling jobs.

I have been experimenting with arming the buy-sell routes (couple of barques and a one or two other ships, all with full crew and guns) to see if it'll help keep the number of pirates down. Unlike the supply convoys, they aren't on a schedule, so a minor detour for selling off ex-pirate ships and maybe some repair isn't a problem. The main supply convoy in my current game is also set up like that (4 barques and 4 trading fluyts), but its size must intimidate pirates, as none have attacked it so far (dunno what'll happen when those late game infamous guys show up, though). The only downside is paying the crew of my "treasure fleet" :P

So, how do you guys set things up? I'm curious to see how other people play.