Thus the tag value changes as the packet travels through the network. Tag Switching and Routing A tag represents a forwarding equivalence class, but it does not represent a particular path through the network. That is, at each hop when a tag is looked up, the next hop chosen is determined by the dynamic routing algorithm. In conventional Layer 3 routing, network topologies frequently include multiple paths between two points, but the normal routing procedure is to select a single path as the Layer 3 route between two points regardless of the load on the links that implement the path. As a consequence, some links are congested and some are underused.
Traffic engineering provides a way to override routing protocols across multiple routers.
It gives you the ability to direct selected traffic over specific paths in the network in order to efficiently use network resources and provide different levels of service. To engineer your network traffic, you follow a two-step process. First, you define a sequence of links between two routers. Tag switching is used to tunnel packets between the two routers over these links. Second, you select the traffic which you want forwarded on to the tunnel.