A storage router and related method are presented for combining multiple Fibre Channel frames together into a single IP datagram for tunneling transmission over an Internet protocol network. The storage router operates by storing incoming Fibre Channel frames in a Fibre Channel frame buffer. When there is sufficient data in the buffer, multiple Fibre Channel frames are taken from the buffer and combined into a single IP datagram. The number of Fibre Channel frames to be combined can be established through a variety of tests, including total bytes of data, number of frames, or through a time-out mechanism. The network layer then fragments the datagram into data link level frames, such as 1500 byte Ethernet frames. When the IP datagram arrives at the final destination, the segmented IP datagram is reconstructed, and the multiple Fibre Channel frames are extracted from the IP datagram and passed on to the recipient Fibre Channel network.