You can press the up button on the D-pad to see two functions: One allows you to organize your wares manually, while the other automatically arranges stuff.

Organizing your stuff manually lets you move/place crates into separate slots all over Sam’s body:

• You have utility pouches and grenade pouches.
• You can put an item in your tool kit.
• An extra pair of shoes can be attached to your boot clip.
• Four items can be strapped to your limbs–i.e. arms and legs.
• The rest are carried on your backpack.

Not all crates can be selected for every slot. For instance, grenade pouches, naturally, only hold grenades. Those strapped on your limbs, meanwhile, should only be smaller-to-medium-sized containers, not large/heavy ones.

The auto-arrange feature, though, simplifies this action significantly. It will automatically place certain items in valid slots, with heavier crates left on your backpack.