A system and method are described herein that are capable of reducing overhead while keeping the traffic separation characteristics between two routers by establishing and using a generic routing encapsulation (GRE) tunnel directly over a link running a point-to-point protocol (PPP) that connects the two routers. Because, the system and method run GRE sessions directly over the PPP link means there is no need to configure the GRE tunnel over an Internet Protocol (IP) connection which means that outer IP header information does not need to be sent across the link. The elimination of the outer IP header reduces the overhead in the traffic sent between the two routers.