A method of handling datagrams in a network device is disclosed. The method includes the steps of receiving an incoming datagram at a port of the network device, determining a type for the incoming datagram based on fields in the incoming datagram and a destination address, adding a tag to the datagram to assist in routing the datagram, obtaining a multiprotocol label switching (MPLS) label when the datagram is a MPLS datagram, processing the datagram based on the MPLS label and the destination address and discarding or forwarding the datagram based upon the processing step. The tag is stripped from the datagram before it is sent from an egress port of the network switch.