Abstract: Segment Routing is a new architecture that leverages the source routing mechanism to enhance packet forwarding in networks. It is designed to operate over either an MPLS (SR-MPLS) or an IPv6 control plane. SR-MPLS encodes a path as a stack of labels inserted in the packet header by the ingress node. This overhead may violate the Maximum SID Depth (MSD), the equipment hardware limitation which indicates the maximum number of labels an ingress node can push onto the packet header. Currently, the MSD varies from 3 to 5 depending on the equipment manufacturer. Therefore, the MSD value considerably limits the number of paths that can be implemented with SR-MPLS, leading to an inefficient network resource utilization and possibly to congestion. We propose and analyze SR-LEA, an algorithm for an efficient path label encoding that takes advantage of the existing IGP shortest paths in the network. The output of SR-LEA is the minimum label stack to express SR-MPLS paths according to the MSD constraint. Therefore, SR-LEA substantially slackens the impact of MSD and restores the path diversity that MSD forbids in the network.