At each level, subdivisions of capacity can float individually between the payload areas of adjacent frames. This individuation allows for clock differences and wandering as payloads traverse the network and are interchanged and multiplexed with others. In this way, the inevitable imperfections of network synchronization can be accommodated. Each subdivision can be readily located by its own pointer that is embedded in the overheads. The pointer is used to find the floating part of the AU or TU, which is called a virtual container (VC). The AU pointer locates a higher-order VC, and the TU pointer locates a lower-order VC. For example, an AU–3 contains a VC–3 plus a pointer, and a TU–2 contains a VC–2 plus a pointer.

A VC is the payload entity that travels across the network, being created and dismantled at or near the service termination point. PDH traffic signals are mapped into containers of appropriate size for the bandwidth required, using single-bit justification to align the clock rates where necessary. POHs are then added for management purposes, creating a VC, and these overheads are removed later where the VC is dismantled and the original signal is reconstituted.

PDH traffic signals to be mapped into SDH are by definition continuous. Each PDH signal is mapped into its own VC, and several VCs of the same nominal size are then multiplexed by byte interleaving into the SDH payload. This arrangement minimizes the delay experienced by each VC. Although, in theory, an ATM traffic signal is made up of discontinuous cells, each 53 bytes long, the gaps between used cells are filled by ATM idle cells that are inserted by ATM equipment when it is connected to a PDH or SDH interface, hence forming a continuous signal. This is then mapped into its own VC, just as for a PDH signal, and again multiplexed with other signals by byte interleaving.