The Postal Service said total mail volume tumbled to 159.9 billion pieces in 2012, a 5 percent dip from 168.3 billion pieces a year ago.
While email has eaten away at mail volumes, online shopping has proved a boon for the package business as the Postal Service delivers items ordered from e-Bay Inc, Amazon.com Inc and others. The agency said package revenue rose by $926 million, or 8.7 percent, during the year.
Postal officials expect this trend to continue. Last week, Donahoe announced that the agency expects package deliveries during the 2012 holiday season to jump 20 percent compared with the same period in the previous year.
Still, the agency faces extremely tight cash. Chief Financial Officer Joseph Corbett said USPS could have a cash shortfall in October 2013.
"It's a ridiculous situation quite frankly to be put in," Corbett said. "There is no other well-run commercial organization with commercial freedoms that would allow themselves to operate on a couple days' cash flow. We need a buffer against any potential downturn."