Understanding Labels Creation per FEC

By default, the router minimizes the number of stacked labels to be managed by generating a single label for all BGP routes advertised by a given VRF; this is a per-VRF label. Upon receiving traffic for a per-VRF label, the router performs a label pop and a route lookup to forward the traffic to the next hop.

You can use the ip mpls forwarding-mode label-switched command to configure the router to generate a label for each different FEC that a BGP route points to in the VPN; this is a per-FEC label. Issuing this command enables you to avoid a route lookup for traffic destined for CE routers, because in this mode traffic is label switched to the corresponding next hop over that interface; a route lookup is not performed.

The route for which a label is allocated can be an ECMP route; in that case, the label-switched traffic uses ECMP.

For the following types of routes, the router always generates a per-VRF label and forwards traffic after a route lookup (rather than label switching the traffic without a route lookup) regardless of the status of this command:

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