Solutions to packet forwarding along a service function path (SFP) by using packet-based transport are provided, where the destination address field in the transport tunnel packet header designates the SFP and the source address field contains the service context. Forwarding of packet flows in different SFPs is simplified by using conventional packet routing and forwarding mechanisms and commercial off-the-shelf routers and switches. For example, route aggregation, load balancing, equal cost multipath routing, and fast path restoration can be applied to service function paths.