Backpacks
 

Backpacks give you extra storage you can carry anywhere. Equip one to take it with you, then sneak and interact to open it. You can also place your backpack on the ground and open it like a normal container. Any items stored inside stay there when you pick the backpack back up.

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There are 5 backpack levels. Each upgrade gives you more storage and unlocks extra features. Level 2 can automatically pick up nearby dropped items. Level 3 can store XP, gives you extra protection when worn, and can send items into a Hopper below it.

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Levels 4 and 5 give you even more storage. They can send items into a Hopper below and also collect items from a Hopper placed above, making them useful for automatic storage setups.