The Advantage of Penultimate Hop Popping in MPLS Networks
Which set of routers you choose to pop the MPLS label can make a difference in network performance. Penultimate hop popping may require a bit longer to configure, but the payout in times of heavy traffic may be worth it.
The MPLS label on a switched packet is popped by either the egress router or the penultimate router, depending on your configuration.
Picture a network that has a single peering connection with a provider network. Many (if not all) flows from the network to any site outside the network likely will flow through the same gateway. If you’ve configured LSPs in your network, many of them will have the same egress router.
If you use ultimate hop popping where the egress router pops the MPLS labels, all those flows and all those packets need to be processed by a single router. If you have a lot of LSPs with a lot of traffic, this step can be resource-intensive.
If you decide to use penultimate hop popping, you essentially terminate the LSP one hop earlier. The MPLS labels are popped by the routers that connect to the egress router, rather than all of them being popped by the same egress router. You can effectively divide and conquer when it comes to label popping, which helps avoid running out of resources during heavy loads.