The position of the transverse bulkheads is the most important aspect in determining the internal subdivision of the ship and has a strong impact on the general arrangement, weight distribution and capacity of the ship. Nowadays, deterministic rules still apply to various types of ships such as gas carriers, naval ships, icebreakers, etc. For these vessels a new floodable length can be defined as the extent of the ship that can be flooded, still assuring compliance with the damage stability criteria. The main objective of this paper is using the floodable lengths to optimize the position of bulkheads. The proposed methodology maximises the margin between the floodable length and the actual flooded length, which consists of two lost contiguous compartments. This method, applicable in the framework of multi-attribute decision-making techniques for ship concept design, allows identification of the minimum number of bulkheads a ship requires, quantification, and maximisation of the safety margin for compliance with deterministic damage stability criteria. This margin ensures maximum flexibility for changes that may be required in the next design phases. The proposed method, based on a multi-stage optimization, is tested on a compressed natural gas carrier to define the minimum number and position of the transverse bulkheads dividing the cargo holds.