I wear mine (same bag) centered on the lower part of my back. It stays that way while I ride with the aid of the extra cross strap, and feels comfortable, shirt-wise and otherwise. I folded the excess strap up and secured it w/ a heavy rubber band, I don't notice it now.
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1989 Schwinn Paramount OS
1980 Mclean/Silk Hope Sport Touring
1983 Bianchi pista
1976 Fuji Feather track
1979 raleigh track
"I've consulted my sources and I'm pretty sure your derailleur does not exist"