This paper considers the problem of minimizing the amount of communication needed to send readings from a set of sensors to a single destination in energy constrained wireless networks. Substantial gains can be obtained using packet aggregation techniques while routing. The proposed routing algorithm, called Data Funneling, allows the network to considerably reduce the amount of energy spent on communication setup and control, an important concern in low data-rate communication. This is achieved by sending only one data stream from a group of sensors to the destination instead of having an individual data stream from each sensor to the destination. Doing so also reduces the probability of packet collisions in the wireless medium because the same amount of information can be transmitted by having fewer nodes send longer packets. Additional gains can be realized by efficient compression of data. This is achieved by losslessly compressing the data by encoding information in the ordering of the sensors' packets. This "coding by ordering" scheme compresses data by suppressing certain readings and encoding their values in the ordering of the remaining packets. Using these techniques together can more than halve the energy spent in communication.