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PS Canada said the Teamsters union initiated a work stoppage on Monday involving about 3,800 employees.
The company said in a statement that all packages currently in the UPS Canada system would be delivered, but ground shipments into Canada and customer pick ups within Canada were suspended.
Also Monday, The Independent Pilots Association said it would honor the strike, meaning the its pilots for UPS would not not fly into or out of Canada.
The strike would not effect UPS operations outside Canada, the company said. UPS Canada has a total of about 6,500 employees at 54 facilities across the country.
In a short statement on its Web site, Teamsters Canada said, UPS "refused the offers" made during the negotiations of a new collective agreement.
"We feel strongly that this action is unwarranted and was avoidable," said Glenn Rice, president of UPS Canada. He also said the existing contract offer "was mutually supported both by Canada Teamsters leadership and UPS Canada."
UPS Inc. is ranked No. 1 on the Transport Topics 100 list of the largest U.S. and Canadian trucking companies.