A system for providing lossless hierarchical caching is disclosed. The system may process, in a first thread, a first set of a plurality of packets in a first cache. Then, the system may determine if a condition associated with processing the first set of the packets indicates that there is potential for packet loss. If the system determines that there is potential for packet loss, a copy of a portion of the first set of the packets may be transmitted to a second cache. The system may process, in a second thread, the copy of the portion of the first set of the packets in the second cache. Additionally, the system may transmit a subset of packets from the first set of packets to a reorder queue for reordering the subset of packets if the subset of packets contain an identifier associated with the reorder queue.