The present invention is a methodology for providing packet aggregation based on transmission window size to achieve improved transport efficiency. One embodiment of the invention includes the steps of receiving an indication of a transmission window size for packets to be transmitted from a first location to a second location where the transmission window size provided by a flow control message. The transmission window size is utilized to determine a bundling factor for transmission of packets from said first location to said second location, the bundling factor being a lesser of a maximum bundling factor and the transmission window size. A transmission window size threshold represents a boundary for a size of a transmission window when transmission of existing frames may be delayed. The frames are bundled according to the bundling factor if the transmission window size is greater than the transmission window size threshold.